If Fly Fitness assigns its rights, what must the assignee do regarding Fly Fitness's obligations?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
6.1.1 Franchisor shall have the right to assign this Agreement, and all of Franchisor's rights and privileges hereunder, to any person, firm, corporation or other entity, without Developer's permission or prior knowledge, provided that, with respect to any assignment resulting in the subsequent performance by the assignee of Franchisor's obligations, the assignee shall expressly assume and agree to perform Franchisor's obligations hereunder.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if Fly Fitness assigns its rights and privileges under the Development Agreement, the assignee must expressly assume and agree to perform Fly Fitness's obligations under the agreement. This requirement ensures that the assignee is legally bound to fulfill the duties and responsibilities that Fly Fitness originally held. This protects the developer's interests by ensuring the agreement remains in effect even if Fly Fitness transfers its rights to another party.
This condition is in place to maintain the integrity of the agreement and to provide assurance to the developer that the terms and conditions will continue to be honored. The clause prevents Fly Fitness from assigning the agreement to an entity that is unwilling or unable to meet the obligations, which could negatively impact the developer's business operations and investment.
This type of clause is fairly standard in franchise agreements, as it protects both parties in the event of a transfer of rights. It is important for prospective Fly Fitness developers to understand this provision, as it clarifies the conditions under which Fly Fitness can assign the agreement and what protections are in place for the developer in such a scenario.