Does the Fly Fitness Development Agreement grant the Developer the right to operate a Franchised Business immediately?

According to Fly Fitness's 2024 Franchise Disclosure Document, the Development Agreement itself does not grant the Developer the right to operate a Franchised Business immediately. Section 2.3 of the agreement explicitly states that it is not a Franchise Agreement and does not grant any right or license to operate a Fly Fitness Franchised Business.

Instead, the Development Agreement grants the Developer the right to develop, construct, open, and operate one Franchised Business within a specific Development Area, but this is contingent on executing a separate Franchise Agreement. The Developer must comply with all conditions precedent to the grant of such rights, as outlined in the agreement. The rights to establish additional Franchised Businesses in the Development Area are also subject to the Developer's compliance with the Mandatory Development Schedule.

In practical terms, this means that a prospective Fly Fitness developer cannot begin operating a franchise immediately upon signing the Development Agreement. They must first execute a separate Franchise Agreement. This two-step process is common in multi-unit development deals, allowing Fly Fitness to ensure each location meets its standards before operation begins. The Development Agreement focuses on securing the rights to develop a territory, while the Franchise Agreement governs the actual operation of each Fly Fitness location.