Under what circumstances is the Development Fee for a Fly Fitness Multi-Unit Development Agreement refundable?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
t and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.
4. DEVELOPMENT AND FRANCHISE FEES.
- 4.1 Multi-Unit Development Fee. In consideration of the rights granted under this Agreement, Developer shall pay Franchisor a development fee ("Development Fee") equal to Fifty Thousand Dollars ($50,000) for your first Fly Fitness Franchised Business and fifty percent (50%) of the discounted initial franchise fee of Twenty Five Thousand Dollars ($25,000) for each Franchised Bu
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Development Fee associated with a Multi-Unit Development Agreement is generally non-refundable. The Development Fee is considered fully earned by Fly Fitness at the time the Multi-Unit Development Agreement is signed.
Specifically, the Development Fee is $50,000 for the first Fly Fitness Franchised Business under the agreement. For each subsequent Franchised Business that the Developer commits to develop as per the Mandatory Development Schedule, the fee is 50% of the initial franchise fee, which amounts to $25,000. This fee structure incentivizes multi-unit development while providing Fly Fitness with immediate compensation for granting development rights.
This non-refundable policy means that a prospective Fly Fitness franchisee entering into a Multi-Unit Development Agreement should be certain of their ability and commitment to fulfill the development schedule. Failure to open the agreed-upon number of locations would result in the loss of the Development Fees paid, as these fees are not returned under any circumstances, according to the FDD.