What happens to the monies in the Fly Fitness Brand Fund if the Franchisor terminates it?

According to Fly Fitness's 2024 Franchise Disclosure Document, although the Brand Fund is intended to be of perpetual duration, Fly Fitness may terminate it at any time and for any reason. However, Fly Fitness will not terminate the Brand Fund until all monies in the Brand Fund have been spent for advertising or promotional purposes. Alternatively, the monies can be returned to contributors, without interest, based on their respective contributions.

This means that if Fly Fitness decides to terminate the Brand Fund, franchisees can expect that the money they contributed will either be used for advertising and promotion to benefit the Fly Fitness brand or returned to them proportionally to their contributions. Franchisees will not receive any interest on the returned contributions.

This provision protects franchisees by ensuring that their contributions to the Brand Fund are used for their intended purpose or returned to them if the fund is terminated. It is fairly standard practice in franchising to have stipulations around how advertising funds are handled upon termination, to ensure transparency and fairness.