How is 'permanent disability' defined in the Fly Fitness Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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 Franchisee's Franchised Business during the six (6)-month period from its onset.
Immediately after the death or permanent disability ofsuch person, or while the Franchise is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Franchised Business shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management pursuant to and on the terms of Section 11.3.3 hereof, pending transfer of the Franchise to the deceased or disabled individual's lawful heirs or successors.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement defines "permanent disability" in the context of franchisee or principal incapacity. Specifically, permanent disability refers to a mental or physical disability, impairment, or condition that is reasonably expected to prevent, or actually does prevent, the person from providing continuous and material supervision of the Fly Fitness franchise operation. This condition must persist during a six-month period from its onset to be considered a permanent disability under the agreement.
This definition has significant implications for Fly Fitness franchisees. If a franchisee or one of their principals experiences such a disability, their interest in the franchise must be transferred to a third party approved by Fly Fitness within six months. Failure to do so constitutes a material default of the agreement, leading to termination of the franchise. This clause ensures that the Fly Fitness business continues to be actively managed and operated, even in the event of a franchisee's or principal's incapacitation.
To maintain continuity during this transition, Fly Fitness requires that an interim successor manager, satisfactory to the franchisor, supervise the business immediately after the death or permanent disability. Alternatively, Fly Fitness may, at its discretion, provide interim management. This requirement aims to protect the brand and ensure consistent operation during the transfer process. The transfer itself is subject to the standard transfer conditions outlined in the franchise agreement, including franchisor approval, and may also be subject to right of first refusal unless transferred by gift, devise, or inheritance.