When is the full Development Fee due to Fly Fitness under the Multi-Unit Development Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
t and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.
4. DEVELOPMENT AND FRANCHISE FEES.
- 4.1 Multi-Unit Development Fee. In consideration of the rights granted under this Agreement, Developer shall pay Franchisor a development fee ("Development Fee") equal to Fifty Thousand Dollars ($50,000) for your first Fly Fitness Franchised Business and fifty percent (50%) of the discounted initial franchise fee of Twenty Five Thousand Dollars ($25,000) for each Franchised Business thereafter Developer agrees to develop as set forth on the Mandatory Development Schedule.
- The Development Fee is fully earned at the time this Multi-Unit Development Agreement is signed and is not refundable under any circumstances. Developer shall pay the full amount of the Development Fee to Franchisor upon Developer's execution of this Agreement.
- 4.2 Application of Development Fee. Contemporaneous with the execution of this Agreement, Developer shall execute the initial Franchise Agreement for the first Franchised Business to be established pursuant to the Mandatory Development Schedule. Developer shall receive the applicable credit from the Development Fee, which shall be applied to the Initial Franchise Fee due under the initial Franchise Agreement. Provided that Developer is in compliance with the Mandatory Development Schedule and is not otherwise in breach of this Agreement, upon the execution each of additional Franchise Agreement for a Franchised Business to be developed hereunder, Developer shall receive the applicable credit from the Development Fee, which shall be applied to the Initial Franchise Fee payable pursuant to each such additional Franchise Agreement. Upon Franchisor's approval, Developer may enter into the initial Franchise Agreement or any su
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the full Development Fee is due upon the execution of the Multi-Unit Development Agreement. The Development Fee is considered fully earned at the time the agreement is signed and is non-refundable under any circumstances.
For a prospective multi-unit developer, this means that the full Development Fee must be paid upfront when signing the agreement, regardless of when the individual Fly Fitness locations are scheduled to open. The Development Fee compensates Fly Fitness for granting the developer the rights to open multiple franchise locations within a specific territory, according to a set development schedule.
It is important to note that while the Development Fee is non-refundable, the developer will receive a credit from the Development Fee that can be applied to the Initial Franchise Fee due under each individual Franchise Agreement as each location opens, provided the developer is in compliance with the development schedule and not in breach of the agreement.