What is the effect of a Fly Fitness franchisee being in compliance with the Franchise Agreement on their ability to establish additional outlets?

According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee's compliance with the Franchise Agreement directly impacts their opportunity to expand with additional outlets. Specifically, if a franchisee is in good standing and wishes to open another Fly Fitness location in an area approved by the company, Fly Fitness may consider granting them the right to do so under a new franchise agreement. However, the document clarifies that Fly Fitness is under no obligation to grant additional franchises, even if the franchisee is in compliance. This decision is at the discretion of Fly Fitness.

This clause means that while performing well and adhering to the agreement increases a franchisee's chances of expanding their business with Fly Fitness, it does not guarantee the right to do so. The franchisor retains the ultimate authority to decide whether to award additional franchises. This is a fairly standard practice in franchising, as franchisors typically want to ensure that existing franchisees are meeting brand standards and operating successfully before allowing them to expand.

It's also important to note that the Franchise Agreement does not grant any options, rights of first refusal, or similar rights to acquire additional franchises. This means that even a top-performing franchisee does not have a guaranteed advantage over new applicants when seeking to open additional Fly Fitness locations. Prospective franchisees should inquire about Fly Fitness's specific criteria and process for awarding additional franchises to understand the factors that will be considered in their application.