Is the Fly Fitness development fee refundable?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
n an additional unit.
We will charge you a development fee ("Development Fee") when you sign the Multi-Unit Development Agreement. The Development Fee is an amount equal to $50,000 for the first unit, plus 50% of the discounted initial franchise fee for each additional Fly Fitness outlet you commit to develop under the Multi-Unit Development Agreement. For a three-unit commitment, the Development Fee is $75,000 and is calculated as follows, $50,000 + ((50% x $25,000) x2) = $75,000. The remaining balance of $12,500 per outlet shall be payable as the developer's subsequent sites are approved and franchise agreements signed. The Development Fee is fully earned by us and due in lump sum when you sign the Development Agreement. The Development Fee is not refundable u
Source: Item 5 — INITIAL FEES (FDD page 8)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the development fee is not refundable under any circumstance. The development fee is fully earned by Fly Fitness when the Multi-Unit Development Agreement is signed.
The development fee is equal to $50,000 for the first Fly Fitness unit, plus 50% of the discounted initial franchise fee for each additional outlet a developer commits to develop under the Multi-Unit Development Agreement. For example, a three-unit commitment carries a development fee of $75,000, calculated as $50,000 + ((50% x $25,000) x2) = $75,000. The remaining balance of $12,500 per outlet is payable as the developer's subsequent sites are approved and franchise agreements signed.
This non-refundable policy means that a prospective Fly Fitness multi-unit developer risks losing the entire development fee if they are unable to fulfill their development obligations or if the agreement is terminated for any reason. It is important for prospective developers to carefully consider their ability to meet the development schedule and their financial capacity before entering into a Multi-Unit Development Agreement with Fly Fitness.
Franchisors typically have varying policies regarding the refundability of development fees. Some may offer partial refunds under specific conditions, while others, like Fly Fitness, have a strict non-refundable policy. It is crucial for potential franchisees to understand these policies before signing any agreements.