Under what condition will the Guarantor have right of subrogation related to Fly Fitness?

According to Fly Fitness's 2024 Franchise Disclosure Document, a guarantor for a Fly Fitness franchise does not automatically have the right of subrogation. Subrogation refers to the right of a guarantor to step into the shoes of the franchisor (Fly Fitness) and exercise the franchisor's rights and remedies against the franchisee, typically after the guarantor has fulfilled the franchisee's obligations.

The FDD specifies that the guarantor will not have any right of subrogation until all guaranteed obligations are fully paid or performed, unless Fly Fitness expressly grants this right in writing. This means that even if the guarantor makes payments or fulfills obligations on behalf of the franchisee, they cannot pursue the franchisee for reimbursement or exercise other rights Fly Fitness holds unless Fly Fitness provides explicit written permission.

This condition protects Fly Fitness by ensuring they maintain control over the enforcement of obligations and prevents potential conflicts or complications that could arise if the guarantor independently pursues the franchisee. For a prospective guarantor, this highlights the importance of understanding the full extent of their obligations and potential liabilities, as well as the need to negotiate for subrogation rights in writing with Fly Fitness if they desire the ability to recover payments made on behalf of the franchisee.