Can a Fly Fitness franchisee face competition from other franchisees?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
During the term of your Franchise Agreement, and provided that you are not in default of your Franchise Agreement, we will not open another Fly Fitness outlet or grant the right to anyone else to open a Fly Fitness outlet within the Territory. However, notwithstanding this limited protection right we grant to you, we reserve all rights to sell our products and services under the Marks in the Territory through alternative distribution channels, as discussed below. There is no minimum sales requirement, market penetration, or other contingency that will affect your limited protected right to operate in the Territory during the term of your Franchise Agreement, unless you are in default of your obligations to us.
You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee may face competition from various sources. The FDD clearly states that franchisees will not receive an exclusive territory. This means that a Fly Fitness franchisee could face competition from other franchisees, from outlets that Fly Fitness owns, or from other distribution channels or competitive brands that Fly Fitness controls.
Even though Fly Fitness will not open another outlet or grant the right to someone else to open a Fly Fitness outlet within a franchisee's territory during the term of the Franchise Agreement (provided the franchisee is not in default), Fly Fitness retains the right to sell products and services under its trademarks in the territory through alternative distribution channels. These alternative channels include retail outlets like grocery stores, captive market locations such as airports and malls, and the Internet.
Fly Fitness also retains all rights not expressly granted in the Franchise Agreement. This allows Fly Fitness or its affiliates to operate Fly Fitness outlets outside the franchisee's territory and to operate other kinds of businesses within the territory. While Fly Fitness states they do not currently do so and have no plans to do so, they and their affiliates may own, acquire, conduct, or authorize others to conduct any form of business at any location selling any type of product or service not offered under the Marks, including a product or service similar to those you will sell at your Franchised Business. Fly Fitness also reserves the right to merge with, acquire, or be acquired by an existing competitive or non-competitive franchise network, chain, or other business; however, they will not convert any acquired business in your Territory to a franchise using their primary trademarks during the Term of your Franchise Agreement. These factors highlight the importance of understanding the competitive landscape and Fly Fitness's broader business strategies before investing in a franchise.