Can the Operating Principal for a Fly Fitness franchise engage in other business activities?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.4.2 Franchisee shall be actively involved in the management of the Franchised Business. Notwithstanding the foregoing, Franchisee shall designate and retain at all times an Operating Principal (the "Operating Principal") to be primarily responsible for and exercise decision-making authority on behalf of the Franchised Business. The Operating Principal shall be Franchisee, if Franchisee is an individual, or a Principal that owns at least ten percent (10%) equity interest in Franchisee if Franchisee is a business entity. Franchisee shall designate its Operating Principal prior to attending the Initial Training Program. The Operating Principal shall, during the entire period he or she serves as Operating Principal, meet the following qualifications:
- (i) Meet all Franchisor's standards and criteria for such individual(s), as set forth in the Manual or otherwise in writing by Franchisor and shall be an individual otherwise acceptable to Franchisor in its sole discretion.
- (ii) Shall devote his or her full time and best efforts to the supervision and management of the Franchised Business and may not engage in any other business activity without Franchisor's consent, which may be withheld in Franchisor's sole discretion.
- (iii) Satisfy the training requirements set forth in Article 7.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Operating Principal is restricted from engaging in other business activities without the franchisor's consent. The FDD specifies that the Operating Principal must devote their full time and best efforts to the supervision and management of the Franchised Business.
This requirement ensures that the Operating Principal is fully dedicated to the success of the Fly Fitness franchise. The franchisor retains the right to withhold consent for outside business activities at their sole discretion. This provision is designed to prevent conflicts of interest and ensure that the Operating Principal's focus remains on the Fly Fitness business.
For a prospective franchisee, this means that the individual designated as the Operating Principal must be prepared to commit their full professional attention to the Fly Fitness franchise. Any existing business ventures or potential new opportunities would need to be carefully considered in light of this restriction and require approval from Fly Fitness.