Within what distance of any Fly Fitness location is a Developer prohibited from participating in a Competitive Business after termination?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Businesses to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any Competitive Business within ten (10) miles of the Territory or any Fly Fitness; or (iii) seek to employ any person who is at that time employed by Franchisor, or otherwise induce such person to leave his or her employment or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Fly Fitnessfranchisees.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a Developer is restricted from engaging in a Competitive Business within a specific radius after the termination or expiration of their agreement. Specifically, for a period of twenty-four (24) months following the termination or transfer of the agreement, the Developer cannot participate as an owner, partner, director, officer, employee, consultant, or agent in any Competitive Business within ten (10) miles of their Territory or any Fly Fitness location. This restriction applies whether the Developer is acting directly or indirectly, for themselves or in conjunction with another entity.
This non-compete clause is designed to protect Fly Fitness's interests by preventing former Developers from using the knowledge and experience gained during their time with Fly Fitness to compete against the franchise. The agreement emphasizes that the Developer acknowledges the fairness and reasonableness of these restrictions, considering their other skills, experience, and education that allow them to pursue income from other sources.
However, the FDD also includes a provision for potential adjustments to the non-compete terms. If a court deems the specified time period or geographic scope to be unreasonable, the agreement states that the restrictions will be reduced in time or scope to what is considered reasonable. This ensures that the non-compete is enforceable and not unduly burdensome on the former Developer, while still protecting Fly Fitness's legitimate business interests.