What happens if a Fly Fitness Developer makes a transfer without Fly Fitness's approval?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.2 Restrictions on Transfers by Developer. Developer's rights and duties under this Agreement are personal to Developer, and Franchisor has made this Agreement with Developer in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Developer. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval. Franchisor may void any transfer made without such approval.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a Developer's rights and duties under the agreement are personal, and the agreement is made in reliance on the Developer's character, skills, and financial capacity. Therefore, a Developer cannot transfer any interest in the agreement without Fly Fitness's prior written approval. Fly Fitness may void any transfer made without such approval.
To gain approval for a transfer, the proposed transferee must meet Fly Fitness's standards for multi-unit franchisees, possess sufficient business experience and financial resources, and agree to complete Fly Fitness's Initial Management Training Program. Additionally, the Developer must have paid all outstanding amounts owed to Fly Fitness and third-party creditors. The transferee must also execute Fly Fitness's then-standard form of Multi-Unit Development Agreement.
These restrictions are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and is capable of operating the business successfully. Failing to obtain Fly Fitness's approval before a transfer can have serious consequences, including the transfer being voided, which could result in the loss of the franchise rights and investment.