What financial criteria must a Fly Fitness multi-unit franchisee satisfy?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.4.1 Developer has (i) received and reviewed Franchisor's then-current Franchise Disclosure Document, (ii) submit to Franchisor all information and other documents requested by Franchisor prior to and as a basis for the issuance of Franchise Agreements in the System, (iii) submit to Franchisor all financial statements reasonably requested by Franchisor, and (iv) satisfy Franchisor's then-current financial criteria for multiunit franchisees.
- 5.4.2 Developer shall be in full compliance with this Agreement, the Mandatory Development Schedule, and all Franchise Agreements with Franchisor and any other agreement with Franchisor or Franchisor's affiliates; and
- 5.4.3 Developer has demonstrated the management skills necessary for competent operation, organization, customer service and record keeping of an additional Franchised Business as determined by Franchisor, in Franchisor's sole discretion.
- 5.5 Termination for Failure of Condition. Notwithstanding anything to the contrary contained herein, in the event that Franchisor determines, in Franchisor's sole and absolute discretion, that any condition set forth in Section 5.4 hereof cannot be satisfied, Franchisor may terminate this Agreement upon written notice to Developer. Termination of this Agreement in accordance with this Section 5.5 shall have no effect on the validity of any other agreement between Franchisor and Developer, provided that Developer is in full compliance therewith.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a multi-unit franchisee must satisfy the franchisor's then-current financial criteria. This requirement is part of the conditions that a developer must meet to receive the Franchise Agreements.
Specifically, the franchisee must submit all financial statements reasonably requested by Fly Fitness. This indicates that Fly Fitness requires a comprehensive overview of the franchisee's financial health to ensure they can meet the financial obligations of developing and operating multiple franchise locations.
Meeting the financial criteria is crucial, as Fly Fitness retains the right to terminate the Multi-Unit Development Agreement if it determines that any of the conditions, including the financial criteria, are not satisfied. This underscores the importance of financial stability and the franchisor's discretion in assessing a franchisee's financial capabilities.