What happens to the goodwill associated with the Fly Fitness franchise upon termination of the agreement?

According to Fly Fitness's 2024 Franchise Disclosure Document, any goodwill that arises from a franchisee's use of Fly Fitness's intellectual property and system will exclusively benefit Fly Fitness and its licensor. Upon the expiration or termination of the franchise agreement, no monetary amount will be assigned to the franchisee for any goodwill associated with their use of the intellectual property.

This means that a Fly Fitness franchisee will not be compensated for any goodwill they may have built up in their franchise location during the term of their agreement. Goodwill, in this context, refers to the positive reputation and customer loyalty associated with the Fly Fitness brand at the franchisee's specific location. This is a standard practice in franchising, as the brand and system are owned by the franchisor, and the franchisee is essentially renting the right to use them.

This clause protects Fly Fitness's ownership of its brand and ensures that the value created through the brand remains with the company, not with individual franchisees. It also reinforces the importance of franchisees adhering to Fly Fitness's standards and practices, as the goodwill is tied to the overall system and not just the individual franchisee's efforts. This is a common provision in franchise agreements to protect the integrity and value of the brand.