Does Fly Fitness negotiate purchase arrangements with suppliers on behalf of franchisees?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Although we have not yet done so, from time to time, we may negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of all franchisees.
We provide no material benefits (such as the grant of additional franchises) based on your use of designated sources; however, failure to use approved items or designated suppliers and contractors may be a default under the Franchise Agreement. Additionally, when there is any default under the Franchise Agreement, we reserve the right, in addition to other remedies available under the Franchise Agreement, to direct suppliers to withhold furnishing products and services to you.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–20)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness may, from time to time, negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of all franchisees. However, Fly Fitness has not yet done so.
Fly Fitness requires franchisees to purchase computer systems and software meeting their minimum specifications. Franchisees must purchase all inventory, equipment, computer systems, and certain software from Fly Fitness's designated suppliers and contractors or in accordance with their specifications. Fly Fitness maintains written lists of approved items of equipment, fixtures, inventory, and supplies (by brand name and/or by standards and specifications) and a list of designated suppliers and contractors for those items, which they will update periodically and issue to all franchisees.
If a franchisee would like Fly Fitness to consider another item or supplier, they must make such request in writing and have the supplier give Fly Fitness samples of its product or service and such other information that Fly Fitness may require. Fly Fitness will make a good-faith effort to notify the franchisee whether they approve or disapprove of the proposed item or supplier within 30 days after they receive all required information to evaluate the product or service. If Fly Fitness does not approve any request within 30 days, it is deemed unapproved. Fly Fitness reserves the right to revoke approval of any item or supplier that does not continue to meet their then-current standards.
Fly Fitness estimates that a franchisee's purchase or lease of products, supplies, and services from approved suppliers (or those which meet their specifications) will represent approximately 41%-47% of their costs to establish their Franchised Business and approximately 9% of their costs for ongoing operation. Currently, there are no purchasing or distribution cooperatives. However, Fly Fitness can require that franchisees make their purchases through a cooperative if one is formed.