Under what circumstances is the transfer fee waived for a transfer of Fly Fitness development rights?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
s prior to a closing of the proposed Transfer; and
- 6.3.8 If Developer, through Developer or any entity, finances any part of the sale price of the Transfer, Developer agrees that all obligations of the transferee under any notes, agreements or security interests to Developer or Developer's entity will be subordinate to the transferee's obligations to Franchisor.
- 6.4 Transfer Fee. As a condition to any Transfer, Developer shall pay Franchisor a transfer fee equal to
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a transfer fee for development rights is normally required. This fee is calculated as $10,000 multiplied by the number of remaining Fly Fitness Franchised Businesses to be developed under the agreement.
However, the transfer fee is waived in two specific cases. First, no transfer fee is payable for transfers among the individuals originally named as the Developer in the introductory paragraph of the Multi-Unit Development Agreement. This suggests that if the development rights are held jointly by multiple individuals, they can transfer their interests among themselves without incurring the fee.
Second, the transfer fee is also waived for a transfer to a spouse upon the death or permanent disability of a Developer. This provision ensures that in the event of unforeseen circumstances affecting the Developer's ability to continue the business, their spouse can take over the development rights without having to pay the transfer fee. This provides a measure of security and continuity for the family in such situations.