Upon termination of the Fly Fitness Franchise Agreement, what is the franchisee required to do with their interest in Electronic Advertising?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee further agrees that this appointment constitutes a power coupled with an interest and is irrevocable until Franchisee has satisfied all of its obligations under the Franchise Agreement and any and all other agreements to which Franchisee and any of its affiliates on the one hand, and Franchisor and any of its affiliates on the other, are parties, including without limitation this Agreement.
Without limiting the generality of the foregoing, Franchisee hereby grants to Franchisor the power and right to do the following:
2.4.1 Direct the Internet Companies to transfer all Franchisee's interest in and to the Electronic Advertising and Telephone Listings to Franchisor, or alternatively, to direct the Internet Companies to terminate any or all of the Electronic Advertising and Telephone Listings;
2.4.2 Direct the Telephone Companies to transfer all Franchisee's interest in and to the Telephone Listings to Franchisor, or alternatively, to direct the Telephone Companies to terminate any or all of the Telephone Listings; and
2.4.3 Execute such standard assignment forms or other documents as the Internet Companies and/or Telephone Companies may require in order to affect such transfers or terminations of Franchisee's interest.
2.5 Certification of Termination.
Franchisee hereby directs the Internet Companies and Telephone Companies to accept, as conclusive proof of Termination of the Franchise Agreement, Franchisor's written statement, signed by an officer or agent of Franchisor, that the Franchise Agreement has terminated.
- 2.6 Cessation of Obligations.
After the Internet Companies and the Telephone Companies have duly transferred all Franchisee's interests as described in paragraph 2.3 above to Franchisor, as between Franchisee and Franchisor, Franchisee will have no further interest in, or obligations with respect
to the particular Electronic Advertising and/or Telephone Listing. Notwithstanding the foregoing, Franchisee will remain liable to each and all of the Internet Companies and Telephone Companies for the respective sums Franchisee is obligated to pay to them for obligations Franchisee incurred before the date Franchisor duly accepted the transfer of such interests, or for any other obligations not subject to the Franchise Agreement or this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, upon termination of the Franchise Agreement, the franchisee is required to transfer all interest in Electronic Advertising to Fly Fitness. Electronic Advertising includes domain names, social media accounts, HTML, URL addresses, access to internet websites, and the right to hyperlink to websites and listings on internet search engines related to the franchised business or the Marks. Fly Fitness can instead direct the internet companies to terminate any or all of the Electronic Advertising and Telephone Listings. Fly Fitness can also direct the Telephone Companies to transfer all Franchisee's interest in and to the Telephone Listings to Franchisor, or alternatively, to direct the Telephone Companies to terminate any or all of the Telephone Listings.
To facilitate this transfer or termination, the franchisee grants Fly Fitness the power to direct internet and telephone companies to transfer or terminate the Electronic Advertising and Telephone Listings. The franchisee also agrees to execute any standard assignment forms or other documents required by the internet and telephone companies to affect the transfers or terminations. Fly Fitness's written statement, signed by an officer or agent, will be accepted as conclusive proof of the Franchise Agreement's termination by the internet and telephone companies.
Once the internet and telephone companies have transferred all the franchisee's interests to Fly Fitness, the franchisee will have no further interest in or obligations with respect to the specific Electronic Advertising or Telephone Listing. However, the franchisee remains liable to the internet and telephone companies for any sums they were obligated to pay before Fly Fitness accepted the transfer of interests, or for any other obligations not subject to the Franchise Agreement or the agreement regarding internet advertising and telephone accounts.