Under what condition is the transfer of any interest of the franchisee in the Fly Fitness agreement allowed?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
city of Franchisee. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval. Franchisor may void any transfer made without such approval.
- 16.3. Transfers by Franchisee. Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Franchise, the Franchised Business, or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, o
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a franchisee's rights and duties under the Franchise Agreement are personal and based on the franchisor's assessment of the franchisee's character, skills, business ability, and financial capacity. Therefore, the franchisee cannot directly or indirectly sell, assign, transfer, or encumber the agreement or any rights within it without first obtaining written consent from Fly Fitness. This restriction extends to the franchise itself, the franchised business, and any related assets, except for transactions in the ordinary course of business.
Fly Fitness retains the right to void any transfer made without its prior written approval. This requirement ensures that Fly Fitness maintains control over who operates its franchises and upholds brand standards.
This clause is typical in franchising, as franchisors want to carefully vet and approve new franchisees to protect their brand and system. A prospective Fly Fitness franchisee should understand that they cannot freely sell or transfer their franchise without the franchisor's permission.