How many instances of understating Gross Revenue can a Fly Fitness franchisee have before it constitutes grounds for termination?

According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee can commit up to two default events during the term of the agreement without facing termination based on the number of defaults alone. However, committing three or more events constituting default, whether or not such defaults were cured, is grounds for not being able to renew the franchise agreement.

This means that while a Fly Fitness franchisee might be able to rectify a couple of missteps during their agreement term, repeated issues could prevent them from renewing their franchise. This policy encourages franchisees to maintain consistent compliance throughout the term of the agreement.

It is important to note that this clause refers to 'events constituting default' generally, and is not specifically limited to underreporting Gross Revenue. Other actions, such as failing to maintain required inventory levels or not adhering to brand standards, could also contribute to these default events. A prospective Fly Fitness franchisee should carefully review the franchise agreement to understand what actions are considered a default.