What rights does Fly Fitness reserve within or outside the franchisee's territory?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
in this Agreement, Franchisee is prohibited from serving and soliciting customers outside of the Territory and from alternative methods of distribution as more fully specified herein.
- 3.2 Reservation of Rights. Franchisee understands and agrees that all rights to any businesses, other than as specified in this Agreement, are fully reserved to Franchisor within or outside of the Territory. By way of example only, Franchisor reserves the rights to offer (i) other products or services not offered under the Marks, (ii) other fitness concepts under the Marks or other trademarks, and (iii) services and products through any channel in the Territory other than a dedicated Fly Fitness outlet, such as to schools, camps, institutional/professional campuses, and conferences; distribution of products through retail outlets, including but not limited to, grocery, health and fitness outlets; and the Internet ("Alternate Distribution Channels"). Franchisee will receive no compensation for Franchisor's sales through Alternate Distribution Channels made within the Territory. Franchisee agrees that such implementation of Franchisor's rights pursuant to this Section 3.2 is deemed not to impair or injure Franchisee's rights pursuant to Section 2 hereof.
4. TERM.
Unless terminated earlier in accordance with the terms set forth in this Agreement, this Agreement and the Franchise granted hereunder shall commence upon the Effective Date set forth above and terminate on the date that is ten (10) years following the Opening Date, as defined in Section 8 hereof (the "Term").
**5.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness retains significant rights both within and outside a franchisee's designated territory. While a franchisee is granted the right to operate their Fly Fitness business at a specific location within their territory, Fly Fitness reserves all other business rights not explicitly granted to the franchisee.
Specifically, Fly Fitness retains the right to offer other products or services not offered under the Fly Fitness marks, other fitness concepts under the Fly Fitness marks or other trademarks, and to distribute services and products through alternative channels such as schools, camps, institutional campuses, conferences, retail outlets, and the internet. A Fly Fitness franchisee will not receive any compensation for sales that Fly Fitness makes through these alternative distribution channels within the franchisee's territory.
Furthermore, Fly Fitness has the right to purchase, merge, acquire, or affiliate with any existing competitive or non-competitive franchise network or business, regardless of the location of those facilities. Fly Fitness can operate, franchise, or license these acquired businesses under any marks, even if they are within or near a franchisee's territory. 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. These reservations of rights allow Fly Fitness to adapt to market changes and pursue various business opportunities without being restricted by individual franchise agreements.