Can Fly Fitness purchase, merge, acquire or affiliate with a competitive franchise network?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that Franchisor has the right, now or in the future, to purchase, merge, acquire or affiliate with an existing competitive or non-competitive franchise network, chain or any other business regardless of the location of that chain's or business' facilities, and to operate, franchise or license those businesses and/or facilities operating under the Marks or any other marks following Franchisor's purchase, merger, acquisition or affiliation, regardless of the location of the facilities (which Franchisee acknowledges may be within the Territory, proximate thereto, or proximate to any of Franchisee's locations).
However, Franchisor represents that it will not convert any such acquired facilities that are operating within the Territory to a Fly Fitness franchise during the Term of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to purchase, merge, acquire, or affiliate with an existing competitive or non-competitive franchise network. Fly Fitness can operate, franchise, or license these businesses under the Fly Fitness brand or any other brand, regardless of the location of the facilities.
This means that Fly Fitness could potentially acquire a competing fitness franchise and operate it either as a Fly Fitness location or under a different brand name. This could increase Fly Fitness's market share and brand recognition, but it could also lead to increased competition for franchisees if the acquired business is located near an existing Fly Fitness franchise.
However, Fly Fitness states that it will not convert any acquired facilities operating within the franchisee's territory into a Fly Fitness franchise during the term of the agreement. This provides some protection to the franchisee, ensuring that Fly Fitness will not directly compete with them by converting a nearby acquired business into a Fly Fitness franchise during the agreement term. This clause offers a degree of territorial security for the franchisee during the term of their agreement.