Under what circumstances can Fly Fitness terminate the agreement immediately without giving the developer an opportunity to cure?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.2 Defaults with No Opportunity to Cure. Developer shall be deemed to be in material default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without affording Developer any opportunity to cure the default, effective immediately upon notice to Developer, if Developer:
- 7.2.1 has misrepresented or omitted material facts in applying for the development rights granted hereunder;
- 7.2.2 falsifies any report required to be furnished Franchisor hereunder;
- 7.2.3 fails to comply with any federal, state or local law, rule or regulation, applicable to the development and operations of Developer's Franchised Businesses, including, but not limited to, the failure to pay taxes;
- 7.2.4 fails to develop the Franchised Businesses in accordance with the Mandatory Development Schedule.
- 7.2.5 attempts a Transfer in violation of the provisions of Article 6 of this Agreement;
- 7.2.6 is convicted of, or pleads no contest to, a felony or to a crime that could damage the goodwill associated with the Marks or does anything to harm the reputation of the System or the goodwill associated with the Marks;
- 7.2.7 receives an adverse judgment or a consent decree in any case or proceeding involving allegations of fraud, racketeering, unfair or improper trade practices or similar claim which is likely to have an adverse effect on the System, or the Marks, the goodwill associated therewith or Franchisor's interest therein, in Franchisor's sole opinion;
7.2.8 fails to comply with the non-disclosure and non-competition covenants in Article 8 hereof;
7.2.9 defaults, or an affiliate of any Developer defaults, under any other agreement, including any Franchise Agreement, with Franchisor or any of its affiliates, or with suppliers or any Developer's landlord and does not cure such default within the time period provided in such other agreement; or
7.2.10 terminates this Agreement without cause.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, there are several circumstances under which Fly Fitness can terminate the agreement with a developer immediately, without providing an opportunity to cure the default. These include misrepresentation or omission of material facts during the application for development rights, falsifying any reports required by Fly Fitness, or failing to comply with any federal, state, or local law applicable to the development and operations of the Franchised Businesses, including failure to pay taxes.
Further reasons for immediate termination involve actions related to the franchise agreement itself. These include attempting a transfer of the agreement in violation of its terms, being convicted of a felony or a crime that could damage the goodwill associated with the Fly Fitness brand, receiving an adverse judgment or consent decree in a case involving allegations of fraud or unfair trade practices that could negatively affect the System, or failing to comply with the non-disclosure and non-competition covenants outlined in the agreement.
Immediate termination can also occur if the developer, or an affiliate, defaults under any other agreement with Fly Fitness, its affiliates, suppliers, or the developer's landlord, and fails to cure the default within the time period specified in that agreement. Finally, Fly Fitness can immediately terminate the agreement if the developer terminates the agreement without cause. These stipulations are important for a prospective franchisee to consider, as they highlight the conditions under which their investment and franchise rights could be immediately terminated.