What rights does the Fly Fitness Franchise Agreement grant regarding participation in franchises, licensing programs, or other business proposals for alternative distribution channels?

According to Fly Fitness's 2024 Franchise Disclosure Document, the Franchise Agreement does not grant franchisees any rights to participate in franchises, licensing programs, or other business proposals for the sale and distribution of Fly Fitness products or services through Alternate Distribution Channels. This means that while a franchisee operates their Fly Fitness outlet, they have no inherent right to be involved in or benefit from any alternative distribution channels that Fly Fitness might establish.

This is a significant point for potential franchisees to consider. Fly Fitness retains the freedom to explore and implement various alternative distribution methods, such as online sales, retail partnerships, or captive market locations like airports, without any obligation to include the franchisee in those ventures. The franchisee's focus remains solely on the operation of their physical Fly Fitness outlet.

The FDD specifies that these alternative distribution channels can operate within or outside the franchisee's territory, and the franchisee will not receive any compensation for sales made through these channels, even if they occur within the franchisee's territory. This underscores the importance of understanding the potential impact of these alternative channels on a franchisee's business and revenue. Prospective franchisees should inquire about Fly Fitness's plans for alternative distribution channels and how they might affect the profitability of a traditional franchise location.

This arrangement is fairly common in franchising, where franchisors often seek to diversify their revenue streams beyond traditional brick-and-mortar locations. However, it's crucial for franchisees to be aware of this dynamic and to assess how it aligns with their investment goals and expectations. Understanding the franchisor's strategy for alternative distribution is a key part of due diligence before investing in a Fly Fitness franchise.