How is 'permanent disability' defined in the Fly Fitness agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.6 Death or Permanent Disability. The grant of rights under this Agreement is personal to Developer, and on the death or permanent disability of Developer, the executor, administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Fly Fitness outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement defines "permanent disability" in the context of the Multi-Unit Development Agreement. It specifies that if a developer experiences a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent them from providing continuous and material supervision of the operation of their Fly Fitness outlet(s) and remaining development schedule during a six-month period from its onset, it will be considered a permanent disability.
This definition is important because it triggers certain requirements within the agreement. Specifically, in the event of a developer's death or permanent disability, their interest in the agreement must be transferred within six months to a third party approved by Fly Fitness. Failure to do so constitutes a material default, leading to the termination of the agreement. This clause ensures that the Fly Fitness business continues to be operated effectively even if the original developer is no longer able to manage it.
Furthermore, immediately following the death or permanent disability, or while the rights are held by a representative of the person, the Fly Fitness outlet(s) and remaining development schedule must be supervised by an interim successor manager satisfactory to Fly Fitness. Alternatively, Fly Fitness may provide interim management, charging a fee equal to 20% of the Gross Revenue generated by the outlet(s), along with reimbursement for all costs of travel, lodging, meals, and other expenses reasonably incurred. This arrangement remains in place until the outlet(s) and development schedule are transferred to the deceased or disabled individual's lawful heirs or successors. This ensures continuity of operations and adherence to Fly Fitness standards during the transition period.