Can Fly Fitness undertake a refinancing or leveraged buy-out?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee 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, Franchisee expressly and specifically waives any claims, demands or damages arising from or relating to the loss of association with or identification of Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring. As a franchisee, you expressly affirm and agree that Fly Fitness may do so. You also specifically waive any claims, demands, or damages arising from or relating to the loss of association with or identification of Fly Fitness as a result of these actions.
This means that Fly Fitness can change its financial structure, ownership, or management without your consent. These changes could impact the way Fly Fitness supports its franchisees, the strategies it pursues, and the overall direction of the company.
This clause protects Fly Fitness from potential legal challenges by franchisees who might feel negatively affected by such changes. It is a fairly standard clause in franchise agreements, as it allows the franchisor the flexibility to adapt to changing market conditions and business opportunities. However, it also places the risk of these changes squarely on the franchisee, who has little to no control over these major decisions but must accept their consequences.