What does the Franchisee and Franchisee's Principal(s) represent and warrant regarding assignment or transfer of claims in the Fly Fitness General Release?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Franchisee and Franchisee's Principal(s) represent and warrant that no portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released hereby has been assigned or transferred by Franchisee or Franchisee's Principal(s) to any other party, firm or entity in any manner including, but not limited to, assignment or transfer by subrogation or by operation of law.
In the event that any claim, demand, or suit shall be made or institute against any Released Franchisor Party because of any such purported assignment, transfer or subrogation, Franchisee and Franchisee's Principal(s) agree to indemnify and hold such Released Franchisor Party free and harmless from and against any such claim, demand, or suit, including reasonable costs and attorneys' fees incurred in connection therewith.
It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchisee and their principals must represent and warrant that they have not assigned or transferred any portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released in the General Release to any other party, firm, or entity. This includes assignments or transfers made through subrogation or by operation of law.
This means that if a franchisee has previously assigned any rights related to claims covered by the release to a third party (e.g., a debt collector), this representation would be false. The franchisee is essentially confirming that they are the sole party entitled to the claims they are releasing. This is a standard provision in general releases to ensure that the release is comprehensive and protects Fly Fitness from future claims by other parties who might assert rights based on a prior assignment by the franchisee.
Furthermore, if any claim, demand, or suit is brought against Fly Fitness due to a purported assignment, transfer, or subrogation by the franchisee or their principals, the franchisee agrees to indemnify and hold Fly Fitness harmless. This includes covering reasonable costs and attorneys' fees incurred in connection with such claims. This indemnification agreement does not require Fly Fitness to make payments to the claimant as a condition for recovering costs under this paragraph. This protects Fly Fitness from legal issues arising from franchisee's prior actions.
In essence, Fly Fitness requires this representation and warranty to ensure that the General Release is valid and enforceable, and to protect itself from potential liabilities arising from any prior assignments or transfers made by the franchisee. Franchisees should carefully review their past dealings and ensure they have not assigned any rights related to potential claims against Fly Fitness before signing the General Release.