Can Fly Fitness engage in a public or private placement of its securities?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor shall have the right to assign this Agreement, and all of Franchisor's rights and privileges hereunder, to any person, firm, corporation, or other entity, without Franchisee's permission or prior knowledge, provided that, with respect to any assignment resulting in the subsequent performance by the assignee of Franchisor's obligations, the assignee shall expressly assume and agree to perform Franchisor's obligations hereunder.
Specifically, and without limitation to the foregoing, Franchisee expressly affirms and agrees that Franchisor may: (i) sell Franchisor's assets and Franchisor's rights to the Marks and the System outright to a third party; (ii) engage in a public or private placement of some or all of Franchisor's securities; (iii) merge, acquire other corporations, or be acquired by another corporation, including competitors; (iv) undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial restructuring; and (v) with regard to any or all of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or relating to the loss of association with or identification of Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to engage in a public or private placement of its securities. The franchise agreement allows Fly Fitness to undertake such actions without requiring permission or prior knowledge from the franchisee.
Specifically, Fly Fitness can sell its assets and rights to its trademarks and system to a third party. Additionally, Fly Fitness can merge with, acquire, or be acquired by another corporation, including competitors. The agreement also permits Fly Fitness to undertake refinancing, recapitalization, leveraged buy-outs, or other economic or financial restructuring.
As a franchisee, it is important to understand that these actions are within Fly Fitness's rights, and the franchisee waives any claims, demands, or damages arising from the loss of association with or identification of Fly Fitness due to these changes. This means that the franchisee accepts the risk that the brand or ownership of Fly Fitness could change, potentially impacting the business's direction and support systems.