Under the Fly Fitness agreement, is a partnership created between the Developer and Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.1 Independent Licensee. Developer is and shall be an independent licensee under this Agreement, and no partnership shall exist between Developer and Franchisor. This Agreement does not constitute Developer as an agent, legal representative, or employee of Franchisor for any purpose whatsoever, and Developer is not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisor. Developer agrees not to incur or contract any debt or obligation on behalf of Franchisor or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other developers or franchisees of Franchisor. Pursuant to the above, Developer agrees to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs or judgments against Franchisor arising out of the relationship hereby established which specifically, but not exclusively, includes costs, losses, expenses, attorneys fees relative to assignment or the transfer of right to develop and transactional costs relative thereto, defaults under any leases, subleases, notes, receipt of revenues or any other relationships arising directly or indirectly out of the development and operation of the Fly Fitness outlets.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement explicitly states that the developer is an independent licensee, and no partnership is formed between the developer and Fly Fitness. The agreement clarifies that the developer is not an agent, legal representative, or employee of Fly Fitness for any purpose. The developer lacks the authority to create obligations on behalf of Fly Fitness.
This means a Fly Fitness developer operates as an independent entity, responsible for their own business decisions and liabilities. They cannot act in a way that binds Fly Fitness to any obligations or debts. This independence is a common structure in franchising, where franchisees operate their businesses while adhering to the franchisor's system and standards.
The agreement further stipulates that the developer must indemnify Fly Fitness from any liabilities, losses, or damages arising from their relationship. This includes legal fees and costs related to the development and operation of Fly Fitness outlets. This provision underscores the developer's responsibility for their actions and protects Fly Fitness from potential legal or financial repercussions.
In practical terms, prospective Fly Fitness developers should understand that they are entering into a business relationship as independent operators, not as partners. They bear the responsibility for managing their business and ensuring compliance with the franchise agreement, while also being liable for any debts or obligations they incur. This arrangement offers developers the potential for business ownership and profit, but also requires them to assume the risks and responsibilities of an independent business owner.