What information and documentation relating to a third-party offer to purchase a Fly Fitness Developer's interest must be provided to the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
6.5 Franchisor 's Right of First Refusal.
- 6.5.1 If Developer wishes to transfer all or part of his or her interest in this Agreement pursuant to any bona fide offer received from a third party to purchase such interest, then Developer shall promptly notify Franchisor in writing of each such offer, and shall provide such information and documentation relating to the offer, as Franchisor may require.
- 6.5.2 Franchisor has the right, exercisable by written notice to Developer within thirty (30) days after receipt of written notification and copies of all documentation required by Franchisor describing such offer, to buy the interest in this Agreement for the price and on the terms and conditions contained in the offer.
- 6.5.3 Developer further agrees, in the event Franchisor exercises its right of first refusal, notwithstanding anything to the contrary contained in the third-party offer, that (i)
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if a Developer wishes to transfer their interest in the Development Agreement due to a bona fide offer from a third party, they must promptly inform Fly Fitness in writing. This notification must include all information and documentation about the offer that Fly Fitness requires.
Fly Fitness has the right to purchase the Developer's interest in the agreement at the price, terms, and conditions specified in the third-party offer. To exercise this right, Fly Fitness must provide written notice to the Developer within 30 days of receiving the notification and all required documentation about the offer.
Furthermore, if Fly Fitness exercises its right of first refusal, it has the option to substitute cash for any other form of consideration in the offer, pay the entire purchase price at closing, have its credit deemed equal to any proposed transferee's credit, have at least 60 days to close the purchase, and receive all customary representations and warranties from the Developer as a seller of franchise development rights. This ensures Fly Fitness can match the offer and maintain control over who becomes a Fly Fitness Developer.