What is the Fly Fitness franchisee's obligation if the Operating Principal is no longer able to serve?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.4.4 If either the Operating Principal or the General Manager is not able to continue to serve in such capacity, or no longer qualifies to act as such in accordance with this Agreement, Franchisee shall promptly notify Franchisor and designate a replacement within thirty (30) days after the Operating Principal or the General Manager, as the case may be, ceases to serve, such replacement being subject to the same qualifications required by this Agreement (including, but not limited to, completing all training and obtaining all certifications required by Franchisor).
Until such replacement is designated, Franchisee shall provide for interim management of the Franchised Business, who shall act in accordance with the terms of this Agreement.
Any failure to comply with the requirements of this Section shall be deemed a material event of default under this Agreement.
Franchisor, in Franchisor's sole discretion, may provide interim management support and charge Franchisee the thencurrent interim management support fee until a replacement Operating Principal or General Manager is properly trained or certified in accordance with Franchisor's requirements.
Franchisee shall pay the interim management support fee, plus any and all costs of travel, lodging, meals, and other expenses reasonably incurred by Franchisor, upon written demand by Franchisor, or Franchisor may withdraw such amounts from Franchisee's designated bank account in accordance with Section 6.1.4.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if the Operating Principal is no longer able to serve, the franchisee must promptly notify Fly Fitness and designate a qualified replacement within thirty days. The replacement must meet the same qualifications as the original, including completing all required training and certifications.
During the interim period until a replacement is found, the franchisee is responsible for providing interim management that adheres to the terms of the franchise agreement. Failure to comply with these requirements constitutes a material breach of the agreement.
Fly Fitness has the option to provide interim management support at its discretion, charging the franchisee a fee for this service. This fee covers the support itself, as well as all associated costs such as travel, lodging, meals, and other expenses. Fly Fitness can demand payment for these services or withdraw the amount from the franchisee's designated bank account.
This clause ensures continuity of operations and adherence to Fly Fitness's standards even in the absence of the Operating Principal. The franchisee bears the responsibility for quickly finding a suitable replacement and may incur additional costs if Fly Fitness provides interim management support.