What happens if there is a default under the Fly Fitness Franchise Agreement?

According to Fly Fitness's 2024 Franchise Disclosure Document, failing to use approved items or designated suppliers and contractors may be a default under the Franchise Agreement. If a franchisee defaults, Fly Fitness reserves the right to direct suppliers to withhold furnishing products and services to the franchisee, in addition to other remedies available under the Franchise Agreement.

This means that if a Fly Fitness franchisee violates the agreement, such as by purchasing supplies from unapproved sources, Fly Fitness can take action. One potential action is instructing approved suppliers to stop providing products and services to the franchisee. This could severely impact the franchisee's ability to operate the business, as they would be unable to obtain necessary inventory and supplies.

It is important for prospective Fly Fitness franchisees to carefully review the Franchise Agreement and understand what constitutes a default. Franchisees should also ensure they adhere to the approved supplier list to avoid any potential issues. The FDD states that Fly Fitness maintains written lists of approved items of equipment, fixtures, inventory, and supplies (by brand name and/or by standards and specifications) and a list of designated suppliers and contractors for those items. Fly Fitness will update these lists periodically and issue the updated lists to all franchisees.