What happens if a Fly Fitness franchisee loses their premises due to their own default?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
You may not change the location of your Franchised Business, without our written consent, which we may withhold in our sole discretion. The conditions under which we may allow you to relocate include the following: loss of your premises not due to your default, demographics of the surrounding area, proximity to other Fly Fitness outlets, lease requirements, traffic patterns, vehicular and pedestrian access, proximity to major roads, available parking, and overall suitability. If you wish to relocate, you must identify a new location for the Franchised Business that meets our approval, in accordance with our then-current site selection procedures, within 60 days. If you do not identify a site within this time period, we may terminate the Franchise Agreement. While you are closed for relocation, you must continue to pay us a minimum Royalty and Brand Fund contribution equal to the average paid during the four (4) calendar quarters immediately preceding the loss of your premises. Should we consent to your relocation, you will be required to pay us a relocation fee equal to twenty-five percent (25%) of the then-current initial franchise fee.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the document outlines the conditions for relocation if a franchisee loses their premises, but it does not specify the consequences if the loss of premises is due to the franchisee's default. The FDD states that relocation may be permitted if the loss of premises is not due to the franchisee's default.
If a Fly Fitness franchisee wishes to relocate, they must find a new location that meets Fly Fitness's approval within 60 days, following the then-current site selection procedures. If a suitable site is not identified within this period, Fly Fitness may terminate the Franchise Agreement. During the relocation period, the franchisee is obligated to continue paying a minimum Royalty and Brand Fund contribution. This contribution is equivalent to the average paid during the four calendar quarters immediately preceding the loss of the premises. If Fly Fitness consents to the relocation, the franchisee must pay a relocation fee equal to 25% of the then-current initial franchise fee.
Because the FDD does not specify what happens if the loss of premises is due to the franchisee's default, it is important for a prospective franchisee to seek clarification from Fly Fitness regarding the specific implications and potential penalties in such a scenario. Understanding these conditions is crucial for making an informed investment decision.