In the event of the death or permanent disability of a Fly Fitness developer, how long does the representative have to transfer the interest in the agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.6 Death or Permanent Disability. The grant of rights under this Agreement is personal to Developer, and on the death or permanent disability of Developer, the executor, administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Fly Fitness outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Immediately after the death or permanent disability of such person, or while the rights granted under this Agreement is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Developer's Fly Fitness outlet(s) and remaining development schedule shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management at a fee equal to twenty percent (20%) of the Gross Revenue generated by the Developer's Fly Fitness outlet(s) during Franchisor's operation thereof, plus any and all costs of travel, lodging, meals and other expenses reasonably incurred by Franchisor, pending transfer of the Developer's Fly Fitness outlet(s) and remaining development schedule to the deceased or disabled individual's lawful heirs or successors.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, in the event of the death or permanent disability of a Fly Fitness developer, their representative has six months from the date of death or permanent disability to transfer the developer's interest in the agreement. This transfer must be to a third party approved by Fly Fitness. Failure to transfer the interest within this six-month timeframe constitutes a material default, leading to the termination of the agreement.
During this period, Fly Fitness requires that the Fly Fitness outlet and remaining development schedule be supervised by an interim successor manager satisfactory to Fly Fitness. Alternatively, Fly Fitness may, at its discretion, provide interim management. If Fly Fitness provides interim management, they will collect a fee equal to 20% of the gross revenue generated by the Fly Fitness outlet, in addition to reimbursement for all travel, lodging, meals, and other expenses reasonably incurred.
The FDD defines "permanent disability" as a mental or physical condition that is reasonably expected to prevent or actually prevents the developer from providing continuous and material supervision of the Fly Fitness outlet(s) and remaining development schedule during the six-month period from its onset. Any transfer under this section, including by devise or inheritance, is subject to the conditions for transfers outlined in the agreement. Unless transferred by gift, devise, or inheritance, the terms of Section 6.5 apply.