What payments must a Fly Fitness franchisee continue to make while closed for relocation?

According to Fly Fitness's 2024 Franchise Disclosure Document, if a franchisee's business is closed for relocation, they must continue to make certain payments to Fly Fitness. Specifically, the franchisee is obligated to pay a minimum Royalty and Brand Fund contribution. This payment is calculated based on the average amount paid during the four calendar quarters immediately preceding the loss of the premises.

This requirement to continue payments during relocation has significant financial implications for a Fly Fitness franchisee. Even though the business is not generating revenue during the relocation period, the franchisee must still allocate funds to cover these ongoing Royalty and Brand Fund contributions. This can strain the franchisee's financial resources and potentially delay the relocation process if funds are limited.

It is important to note that the obligation to pay these fees is contingent upon the relocation being approved by Fly Fitness. The franchisor has the right to withhold consent for relocation at their sole discretion. The FDD outlines several factors Fly Fitness considers when evaluating a relocation request, including the reason for the loss of premises, demographics of the surrounding area, proximity to other Fly Fitness outlets, lease requirements, traffic patterns, access, parking, and overall suitability of the new location. Additionally, if Fly Fitness consents to the relocation, the franchisee will be required to pay a relocation fee equal to twenty-five percent (25%) of the then-current initial franchise fee.