For Fly Fitness, what happens to the Franchisee's liabilities and obligations upon termination of the agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal, if any, shall:
18.1.1. immediately cease to operate the Franchised Business, and shall not thereafter, directly, or indirectly identify himself, herself or itself as a Fly Fitness owner, franchisee, or licensee;
18.1.2. immediately and permanently (i) cease to use the Marks, any imitation of any Mark, logos, copyrighted material, or other Intellectual Property, Confidential Information, other confidential or proprietary material or indicia of a Fly Fitness outlet, (ii) cease to use any trade name, trade or service mark or other commercial symbol that suggests a current or past association with Franchisor, Franchisor's affiliates, or the System and (iii) de-identify the Franchised Business premises.
In particular, Franchisee shall cease to use, without limitation, all signs, billboards, advertising materials, displays, stationery, forms, and any other articles, which display the Marks;
18.1.3. take such action as may be necessary to cancel any assumed name or equivalent registration that contains the Mark or any other service mark or trademark of Franchisor, and Franchisee shall furnish Franchisor with evidence of compliance with this obligation which is satisfactory to Franchisor, within five (5) days after termination or expiration of this Agreement;
18.1.4. promptly pay all sums owing to Franchisor and its affiliates.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee must immediately cease operating the Franchised Business and cannot identify themselves as a Fly Fitness owner, franchisee, or licensee. This means the franchisee loses all rights to operate under the Fly Fitness brand and system.
Furthermore, the franchisee must immediately and permanently stop using Fly Fitness's Marks, logos, copyrighted material, Intellectual Property, Confidential Information, and any other materials that identify the business as a Fly Fitness outlet. They also must cease using any trade name or service mark that suggests an association with Fly Fitness. The franchisee is responsible for de-identifying the Franchised Business premises, including removing all signs, billboards, advertising materials, and stationery that display Fly Fitness's Marks.
Additionally, the franchisee must take action to cancel any assumed name registrations that contain Fly Fitness's Marks and provide evidence of compliance to Fly Fitness within five days of termination or expiration. Finally, the franchisee is obligated to promptly pay all sums owed to Fly Fitness and its affiliates. This ensures that all financial obligations are settled upon the termination of the agreement.