In the Fly Fitness franchise agreement, what information is required for each Principal?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
In consideration for such specialized training, trade secrets, Confidential Information and rights, Franchisee, and Principal(s) covenant that, except as otherwise approved in writing by Franchisor:
19.5.1 During the term of this Agreement, Franchisee and Principal(s) shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any fitness or exercise business similar to the System; or (iii) seek to employ any person who is at that time employed by Franchisor or by any other System franchisee, or otherwise induce such person to leave his or her employment; or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Fly Fitness franchisees or Franchisor-affiliated outlets.
19.5.2.
Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principal(s) shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any fitness or exercise business within ten (10) miles of the Territory or any Fly Fitness location; or (iii) seek to employ any person who is at that time employed by Franchisor or by any other System franchisee, or otherwise induce
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the agreement stipulates certain obligations and restrictions for the franchisee and its principals. Specifically, during the term of the agreement, the franchisee and principals are prohibited from engaging in activities that could harm the Fly Fitness system. This includes diverting customers to competitors, participating in similar fitness businesses, soliciting employees of Fly Fitness or its franchisees, or taking any action that could damage the goodwill associated with the Fly Fitness brand. These restrictions are designed to protect Fly Fitness's market position and brand reputation.
Post-termination or transfer of the agreement, these restrictions continue for 24 months. During this period, the franchisee and principals are barred from engaging in competitive fitness businesses within a 10-mile radius of the former Fly Fitness location or any other Fly Fitness location. This non-compete clause aims to prevent former franchisees from leveraging the knowledge and experience gained while operating a Fly Fitness franchise to directly compete with the brand.
These stipulations highlight the importance Fly Fitness places on protecting its business interests and maintaining a consistent brand experience across all franchise locations. Prospective franchisees and their principals should carefully consider these restrictions and their potential impact on their future business endeavors before entering into a franchise agreement with Fly Fitness.