Will a Fly Fitness franchisee receive compensation for sales made through alternative distribution channels in their territory?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ritory to a franchise using our primary trademarks during the Term of your Franchise Agreement.
We and our affiliates may sell products and services under the Marks within or outside the Territory or development area through any method of distribution other than a dedicated Fly Fitness outlet location, such as distribution through retail outlets, including but not limited to, grocery stores; in captive market locations, such as airports and malls; and the Internet ("Alternative Distribution Channels"). You will receive no compensation for our sales through Alternative Distribution Channels in the Territory or development area.
You may only solicit sales from customers in your Territory. You may not use Alternative Distribution Channels, such as the Internet, catalog sales, telemarketing, or other direct marketing to make sales outside your Territory; however, we will include a listing on our website of your Fly Fitness outlet location. Your local advertising must target customers in your Territory, although the reach of your local advertising may extend beyond your Territory.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees will not receive compensation for sales made through alternative distribution channels within their territory. Fly Fitness and its affiliates retain the right to sell products and services under the Fly Fitness brand through various methods of distribution other than a dedicated Fly Fitness outlet. These alternative channels include retail outlets like grocery stores, captive market locations such as airports and malls, and the Internet.
This policy means that even if Fly Fitness or its affiliates generate sales within a franchisee's territory through these alternative channels, the franchisee will not receive any portion of that revenue. This is a significant consideration for prospective franchisees as it limits their potential earnings and introduces competition from the franchisor itself within their designated territory.
Fly Fitness franchisees are restricted to soliciting sales only from customers within their territory and are prohibited from using alternative distribution channels to make sales outside of their territory. However, Fly Fitness will include a listing of the franchisee's Fly Fitness outlet location on its website. While local advertising should target customers within the franchisee's territory, the reach of that advertising may extend beyond the territory. The Franchise Agreement does not grant franchisees any rights to participate in franchises, licensing programs, or other business proposals for the sale and distribution of Fly Fitness products or services through alternative distribution channels.