Does the Fly Fitness franchise agreement include a section on 'Territory'?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 22: CONTRACTS]
3. TERRITORY.
- 3.1 Territory. This Agreement grants Franchisee the right to operate the Franchised Business at a single location and from within the Territory. Subject to Section 3.2 below, Franchisor agrees that during the Term of this Agreement, Franchisor will not operate, and will not authorize any other franchisees to operate, a Fly Fitness outlet in the Territory using the same Marks as licensed to Franchisee in this Agreement so long as Franchisee is not in default under this Agreement or this Agreement has not been terminated. Except as otherwise specified in this Agreement, Franchisor reserves the right to open, operate or franchise Fly Fitness franchises bordering and adjacent to the Territory. Except as set forth in this Agreement, Franchisee is prohibited from serving and soliciting customers outside of the Territory and from alternative methods of distribution as more fully specified herein.
- 3.2 Reservation of Rights. Franchisee understands and agrees that all rights to any businesses, other than as specified in this Agreement, are fully reserved to Franchisor within or outside of the Territory. By way of example only, Franchisor reserves the rights to offer (i) other products or services not offered under the Marks, (ii) other fitness concepts under the Marks or other trademarks, and (iii) services and products through any channel in the Territory other than a dedicated Fly Fitness outlet, such as to schools, camps, institutional/professional campuses, and conferences; distribution of products through retail outlets, including but not limited to, grocery, health and fitness outlets; and the Internet ("Alternate Distribution Channels"). Franchisee will receive no compensation for Franchisor's sales through Alternate Distribution Channels made within the Territory. Franchisee agrees that such implementation of Franchisor's rights pursuant to this Section 3.2 is deemed not to impair or injure Franchisee's rights pursuant to Section 2 hereof.
1. RECITATIONS.
The Recitations set out above form part of this Agreement.
2. GRANT OF FRANCHISE.
Franchisor hereby grants to Franchisee and Franchisee accepts, upon the terms and conditions contained in this Agreement, the license to operate a Fly Fitness franchise (the "Franchise" or the "Franchised Business"), using only the Marks licensed hereunder, in strict conformity with the System, which may be changed, improved, and further developed by Franchisor from time to time. This grant applies only to a single location within a territory that is designated in Attachment 3 attached hereto and incorporated herein (the "Territory").
3. TERRITORY.
| "(If there is no Approved Location on the Effective Date, insert: **TERRITORY AND ADDRESS | |
|---|---|
| TO BE DETERMINED AND INSERTED AFTER A FLY FITNESS PREMISES IS IDENTIFIED | |
| BY FRANCHISEE AND APPROVED BY FRANCHISOR, IN ACCORDANCE WITH SECTION | |
| 8.1 OF THE FRANCHISE AGREEMENT, IN | THE SITE SEACH AREA OF |
| ) | |
| Territory (insert map and/or define by zip codes, counties, city limits, or physical boundaries such as | |
| roads, highways, and rivers): | |
| Franchised Business Address: | |
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Yes, according to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement does include a section on 'Territory'.
Section 3.1 of the franchise agreement outlines the territory granted to the franchisee, which is a single location. Fly Fitness agrees not to operate or authorize other franchisees to operate a Fly Fitness outlet in the franchisee's territory using the same marks, as long as the franchisee is not in default of the agreement. However, Fly Fitness reserves the right to open, operate, or franchise Fly Fitness locations bordering the territory. The franchisee is prohibited from serving or soliciting customers outside of their designated territory.
Section 3.2 outlines Fly Fitness's reservation of rights, stating that all rights to businesses other than those specified in the agreement are reserved to Fly Fitness, both inside and outside the franchisee's territory. This includes the right to offer other products or services, other fitness concepts, and services/products through alternate distribution channels such as schools, camps, retail outlets, and the Internet. The franchisee will not receive compensation for Fly Fitness's sales through these alternate channels within the territory.
Attachment 3 to the franchise agreement designates the specific territory granted to the franchisee. If there is no approved location on the effective date of the agreement, the territory and address will be determined and inserted after a Fly Fitness premises is identified by the franchisee and approved by Fly Fitness. The territory can be defined by zip codes, counties, city limits, or physical boundaries.