Can the non-competition covenants in the Fly Fitness agreement be waived?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to reduce the scope of any covenant, including non-compete agreements, without the franchisee's consent. This modification becomes effective immediately upon the franchisee receiving written notice. The franchisee is then obligated to comply with the covenant as modified by Fly Fitness.
This clause provides Fly Fitness with considerable flexibility to adjust the non-compete restrictions. This could be beneficial if a franchisee faces unforeseen circumstances that make the non-compete agreement unduly burdensome. However, it also means that Fly Fitness could unilaterally alter the non-compete terms to the franchisee's disadvantage during the agreement.
It is important for a prospective Fly Fitness franchisee to understand the implications of this clause. While it offers a potential avenue for relief from the non-compete obligations, it also introduces uncertainty, as the terms can be changed by Fly Fitness at any time with written notice. Franchisees should seek legal counsel to fully understand their rights and obligations under the non-compete agreement and the potential impact of this modification clause.