Under what circumstances related to death or disability of the franchisee or a principal can the Fly Fitness franchise agreement be terminated?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
The grant of rights under this Agreement is personal to Franchisee, and on the death or permanent disability of Franchisee or any of Franchisee's Principals, the executor, administrator, conservator or other personal representative of Franchisee or Principal, as the case may be, shall be required to transfer Franchisee's or Principal's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor.
Failure to transfer in accordance with the forgoing will constitute a material default and the Franchise granted by this Agreement will terminate.
A transfer under this Section 16.7, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 16 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 16.6 above.
For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Franchisee's Franchised Business during the six (6)-month period from its onset.
Immediately after the death or permanent disability ofsuch person, or while the Franchise is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Franchised Business shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management pursuant to and on the terms of Section 11.3.3 hereof, pending transfer of the Franchise to the deceased or disabled individual's lawful heirs or successors.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement can be terminated if the franchisee or a principal of the franchisee dies or becomes permanently disabled, and their interest in the agreement is not transferred to a franchisor-approved third party within six months of the event.
Fly Fitness defines "permanent disability" as a mental or physical condition that prevents the person from providing continuous and material supervision of the franchise during the six-month period following the onset of the disability. After the death or permanent disability of the franchisee or principal, an interim successor manager, satisfactory to Fly Fitness, must supervise the franchised business. Alternatively, Fly Fitness may, at its sole discretion, provide interim management while the franchise is being transferred to the deceased or disabled individual's lawful heirs or successors.
This transfer is subject to the standard transfer conditions outlined in the franchise agreement. Failure to complete the transfer within the specified timeframe constitutes a material default, leading to the termination of the Fly Fitness franchise agreement. This clause ensures the continued operation and management of the Fly Fitness franchise under approved leadership, even in unforeseen circumstances.