Under what circumstances can Fly Fitness terminate the franchise agreement without allowing the franchisee an opportunity to cure the default?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
17.2.18. makes any unauthorized use of the Marks or copyrighted material or any unauthorized use or disclosure of Confidential Information (as defined in Section 19.2);
17.2.19. fails to comply with the non-competition covenants in Section 19.5;
17.2.20. defaults in the performance of Franchisee's obligations under this Agreement three (3) or more times during the term of this Agreement or has been given at least two (2) notices of default in any consecutive twelve (12)–month period, whether or not the defaults have been corrected;
17.2.21. has insufficient funds to honor a check or electronic funds transfer two (2) or more times within any consecutive twelve (12)-month period;
17.2.22. defaults, or an affiliate of Franchisee defaults, under any other agreement, including any other franchise agreement, with Franchisor or any of its affiliates, suppliers or landlord and does not cure such default within the time period provided in such other agreement; or
17.2.23. terminates this Agreement without cause.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
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 franchise agreement immediately without providing an opportunity for the franchisee to cure the default. These non-curable defaults, outlined in Section 17.2, include unauthorized use of the Fly Fitness marks or copyrighted material, unauthorized use or disclosure of confidential information, and failure to comply with non-competition covenants.
Additionally, Fly Fitness can terminate the agreement without an opportunity to cure if the franchisee defaults in their obligations three or more times during the term of the agreement, or if the franchisee has been given at least two notices of default within any consecutive twelve-month period, regardless of whether the defaults were corrected. Insufficient funds to honor a check or electronic funds transfer two or more times within any consecutive twelve-month period also constitutes a non-curable default.
Furthermore, if a franchisee or their affiliate defaults under any other agreement with Fly Fitness, its affiliates, suppliers, or landlord, and fails to cure the default within the time period provided in that agreement, Fly Fitness can terminate the franchise agreement immediately. Finally, if the franchisee terminates the agreement without cause, it is considered a non-curable default, allowing Fly Fitness to terminate the agreement without providing an opportunity to cure.