Does Fly Fitness have an obligation to grant a franchisee the right to establish additional Fly Fitness outlets?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Unless you have entered into a Multi-Unit Development Agreement, we may, but have no obligation to, consider granting to you the right to establish additional Fly Fitness outlets under other franchise agreements if you are in compliance with the Franchise Agreement and propose to open another Fly Fitness outlet in an area and at a location we approve. The Franchise Agreement grants you no options, rights of first refusal or similar rights to acquire additional franchises.
We reserve all rights not expressly granted in the Franchise Agreement. For example, we or our affiliates may own, operate, or authorize others to own or operate Fly Fitness outlets outside of the Territory and may operate other kinds of businesses within the Territory. Although we do not currently do so and have no plans to do so, we and our affiliates may own, acquire, conduct, or authorize others to conduct, any form of business at any location selling any type of product or service not offered under the Marks, including a product or service similar to those you will sell at your Franchised Business. We reserve the right to merge with, acquire, or be acquired by, an existing competitive or non-competitive franchise network, chain, or other business; however, we will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness is not obligated to grant a franchisee the right to establish additional Fly Fitness outlets. Unless a franchisee has entered into a Multi-Unit Development Agreement, Fly Fitness may consider granting the right to establish additional Fly Fitness outlets under other franchise agreements if the franchisee is in compliance with the Franchise Agreement and proposes to open another Fly Fitness outlet in an area and at a location Fly Fitness approves. The Franchise Agreement does not grant franchisees any options, rights of first refusal, or similar rights to acquire additional franchises. Fly Fitness reserves all rights not expressly granted in the Franchise Agreement.
This means that while a Fly Fitness franchisee can request the opportunity to open additional locations, Fly Fitness is under no obligation to approve such a request. The decision to grant additional franchises is at Fly Fitness's discretion. This is a fairly standard practice in franchising, as franchisors typically want to retain control over the growth and development of their brand.
For a prospective Fly Fitness franchisee, this implies that their initial investment is likely limited to a single Fly Fitness outlet unless they pursue a multi-unit development agreement. If a franchisee is interested in expanding beyond a single unit, they should discuss the possibility of a multi-unit agreement with Fly Fitness during the initial stages of their franchise exploration. It is important to note that even with a multi-unit agreement, continued expansion is typically contingent on the franchisee's compliance with the agreement and the franchisor's approval of proposed locations.