In the event of death or permanent disability of a Fly Fitness franchisee, how long does the representative have to transfer the interest in the Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Death or Permanent Disability.
The grant of rights under this Agreement is personal to Franchisee, and on the death or permanent disability of Franchisee or any of Franchisee's Principals, the executor, administrator, conservator or other personal representative of Franchisee or Principal, as the case may be, shall be required to transfer Franchisee's or Principal'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 the Franchise granted by this Agreement will terminate.
A transfer under this Section 16.7, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 16 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 16.6 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 Franchisee's Franchised Business during the six (6)-month period from its onset.
Immediately after the death or permanent disability ofsuch person, or while the Franchise is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Franchised Business shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management pursuant to and on the terms of Section 11.3.3 hereof, pending transfer of the Franchise to the deceased or disabled individual's lawful heirs or successors.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
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 franchisee or one of their principals, the executor, administrator, conservator, or other personal representative is required to transfer the franchisee's or principal's interest in the Franchise Agreement. This transfer must occur within six months from the date of death or permanent disability. The term "permanent disability" is defined as a mental or physical condition that prevents the person from providing continuous and material supervision of the Fly Fitness franchised business during that six-month period.
Failure to transfer the interest within the specified six-month timeframe constitutes a material default, leading to the termination of the Fly Fitness franchise. Any transfer under this condition is subject to the standard transfer conditions outlined in the franchise agreement. This includes transfers by devise or inheritance, and unless transferred by gift, devise, or inheritance, is subject to other transfer terms within the agreement.
To ensure the continued operation of the Fly Fitness business during this transition, an interim successor manager, satisfactory to Fly Fitness, must supervise the franchised business immediately after the death or permanent disability. Alternatively, Fly Fitness, at its sole discretion, may provide interim management while awaiting the transfer of the franchise to the deceased or disabled individual's lawful heirs or successors. This ensures business continuity and adherence to Fly Fitness standards during the transfer process.