Does the Fly Fitness franchisee have to comply fully with the agreement before a transfer can be approved?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
n shall be deemed to require Franchisor to remain in the fitness business or to offer or sell any products or services to Franchisee.
- 16.2. Restrictions on Transfers by Franchisee. Franchisee's rights and duties under this Agreement are personal to Franchisee as it is organized and with the Principals of the business as they exist on the date of execution of this Agreement, and Franchisor has made this Agreement with Franchisee in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval. Franchisor may void any transfer made without such approval.
- 16.3. Transfers by Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the franchisee's rights and duties under the agreement are personal, and Fly Fitness has made the agreement based on their perceptions of the franchisee's character, skills, business ability, and financial capacity. Therefore, the franchisee cannot transfer the agreement without Fly Fitness's prior written approval, and Fly Fitness may void any transfer made without such approval.
Specifically, the franchisee cannot directly or indirectly sell, assign, transfer, give, devise, convey, or encumber the agreement, the franchise, the franchised business, or any assets thereof without first obtaining Fly Fitness's written consent. This restriction applies to any transfer, assignment, or encumbrance that may occur by operation of law.
While the FDD states that a transfer cannot occur without Fly Fitness's written consent, it does not explicitly state that the franchisee must be in full compliance with the agreement to obtain approval for a transfer. To clarify the specific conditions required for transfer approval, a prospective franchisee should directly ask Fly Fitness about the criteria they use to evaluate transfer requests and whether any specific compliance requirements must be met.