How is the Successor Agreement Fee for a Fly Fitness franchise calculated?

According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees have the option to enter into a new franchise agreement at the end of their current term for three additional terms, each lasting five years. This is referred to as the Successor Franchise Agreement. To exercise this option, the franchisee must pay a Successor Agreement Fee.

The Successor Agreement Fee is calculated as ten percent of the then-current Initial Franchise Fee. This means the fee is not a fixed amount but will fluctuate depending on what Fly Fitness charges new franchisees at the time of renewal.

For a prospective Fly Fitness franchisee, this implies that the cost to renew the franchise agreement could be higher or lower than the initial franchise fee, depending on how the initial fee changes over time. It is important to monitor the initial franchise fee as the renewal date approaches to anticipate the cost of the Successor Agreement Fee.