What is the length of each additional term under a Fly Fitness Successor Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Subject to the terms and conditions of this Agreement, Franchisee shall have the right, following the expiration of the Term hereof, to enter into a new franchise agreement and other agreements then customarily employed by Franchisor and in the form then generally being offered to prospective franchisees in the state in which the Territory is located (the "Successor Franchise Agreement") for three (3) additional terms equal to five (5) years each. The term of such Successor Franchise Agreement shall commence upon the date of expiration of the immediately preceding term. Franchisee shall be charged a successor fee equal to ten percent (10%) of the then current Initial Fee ("Successor Agreement Fee").
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee has the option to enter into a Successor Franchise Agreement for three additional terms, each lasting five years, provided they meet certain conditions. This means that after the initial franchise term concludes, a franchisee in good standing has the potential to extend their business operations with Fly Fitness for a total of 15 more years, divided into three separate renewal periods.
To qualify for a Successor Franchise Agreement, the franchisee must meet several requirements. These include not having committed three or more uncured defaults during the current term, completing any additional required training to Fly Fitness's satisfaction, securing the right to continue occupying the business premises for the full term of the Successor Franchise Agreement (or obtaining approval for a new location), executing a general release of all claims against Fly Fitness, and performing any required remodeling or redecoration to conform to current standards. Additionally, the franchisee must pay a Successor Agreement Fee, which is equal to ten percent of the then-current Initial Fee, and sign the Successor Franchise Agreement.
The availability of these renewal terms provides an opportunity for Fly Fitness franchisees to continue building their business and brand recognition in their territory. However, franchisees should be aware of the conditions they must meet to qualify for renewal and plan accordingly to ensure they remain eligible. This includes maintaining a strong operational record, staying current with training requirements, and being prepared to invest in any necessary updates to their business premises. Franchisees should also be aware that Fly Fitness reserves the right not to offer a successor agreement if they decide to withdraw from the franchisee's marketing area or territory.