Is the Fly Fitness franchise agreement binding on the successors and assigns of the franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 21.2.
Successors.
This Agreement shall bind and inure to the benefit of the successors and assigns of Franchisor and shall be personally binding on and inure to the benefit of Franchisee (including the individuals executing this Agreement on behalf of the Franchisee entity) and its or their respective heirs, executors, administrators and successors or assigns; provided, however, the foregoing provision shall not be construed to allow a transfer of any interest of Franchisee or Principal(s) in this Agreement or the Franchised Business, except in accordance with Article 16 hereof.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement is binding on the successors and assigns of the franchisor. The agreement also extends to the franchisee and their heirs, executors, administrators, successors, or assigns. However, the franchisee cannot transfer their interest in the agreement or the franchised business unless they comply with the transfer provisions outlined in Article 16 of the agreement. This means that while Fly Fitness can transfer the agreement to another party, the franchisee's ability to do so is restricted and requires approval from Fly Fitness.
This clause ensures that if Fly Fitness is acquired or merges with another entity, the new entity will be bound by the existing franchise agreements. For a franchisee, this provides some assurance that the terms of their agreement will remain in effect even if the ownership of Fly Fitness changes. However, the franchisee's ability to transfer their business is limited, giving Fly Fitness control over who can become a franchisee within their system.
It is important for a prospective franchisee to carefully review Article 16 to understand the specific conditions and requirements for transferring their franchise. This includes understanding the approval process, any potential transfer fees, and the criteria Fly Fitness will use to evaluate potential transferees. This is a fairly standard clause in franchise agreements, as franchisors typically want to maintain control over who operates their branded businesses.