Under what conditions can Fly Fitness assign the Franchise Agreement to another entity?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ion set forth in Section 5.4 hereof cannot be satisfied, Franchisor may terminate this Agreement upon written notice to Developer. Termination of this Agreement in accordance with this Section 5.5 shall have no effect on the validity of any other agreement between Franchisor and Developer, provided that Developer is in full compliance therewith.
6. TRANSFER.
6.1 Transfers by Franchisor.
- 6.1.1 Franchisor shall have the right to assign this Agreement, and all of Franchisor's rights and privileges hereunder, to any person, firm, corporation or other entity, without Developer's permission or prior knowledge, provided that, with respect to any assignment resulting in the subsequent performance by the assignee of Franchisor's obligations, the assignee shall expressly assume and agree to perform Franchisor's obligations hereunder. Specifically, and without limitation to the foregoing, Developer expressly affirms and agrees that Franchisor may: (i) sell Franchisor's assets and Franchisor's rights to the Marks and the System outright to a third party; (ii) engage in a public or private placement of some or all of Franchisor's securities; (iii) merge, acquire other corporations, or be acquired by another corporation, including competitors; (iv) undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial restructuring; and (v) with regard to any or all of the above sales, assignments and dispositions, Developer expressly and specifically waives any claims, demands or damages arising from or relating to the loss of association with or identification of Franchisor. Nothing contained in this Agreement shall require Franchisor to remain in the business franchised herein or to offer the same products and services, whether or not bearing the Marks, in the event that Franchisor exercises its prerogative hereunder to assign Franchisor's rights in this Agreement.
- 6.1.2 Developer agrees that Franchisor has the right, now or in the future, to purchase,
merge, acquire or affiliate with an existing competitive or non-competitive franchise network, chain or any other business regardless of the location of that chain's or business' facilities, and to
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to assign the Development Agreement to another entity without the Developer's (franchisee) permission or prior knowledge. However, if the assignment results in the assignee performing Fly Fitness's obligations, the assignee must expressly assume and agree to perform those obligations.
Fly Fitness can sell its assets and rights to the Marks and the System to a third party, engage in public or private placements of securities, merge with or acquire other corporations (including competitors), or undertake financial restructuring. The franchisee specifically waives any claims, demands, or damages related to the loss of association with Fly Fitness due to these actions.
Furthermore, Fly Fitness is not required to remain in the franchised business or offer the same products and services, even those bearing the Marks, if it chooses to assign its rights in the Development Agreement. Fly Fitness also has the right to purchase, merge, acquire, or affiliate with existing competitive or non-competitive franchise networks or other businesses, regardless of their location, and operate those businesses under any marks, even within or near the franchisee's Development Area or Franchised Businesses.