How does Fly To Fit apply payments received from a franchisee?

According to Fly To Fit's 2024 Franchise Disclosure Document, Fly To Fit has the discretion to allocate payments received from a franchisee towards any outstanding obligation in any order they deem appropriate. This means that regardless of how a franchisee might designate a payment, Fly To Fit can apply it to any debt the franchisee owes.

For a prospective Fly To Fit franchisee, this policy has significant implications. If a franchisee has multiple outstanding debts, such as royalty fees, marketing fund contributions, or late fees, Fly To Fit has the power to decide which debt the payment will cover. This could be disadvantageous to the franchisee if they want to prioritize payment towards a specific obligation.

This type of clause is not uncommon in franchise agreements, as it provides the franchisor with flexibility in managing payments and ensuring all obligations are met. However, franchisees should be aware of this provision and understand that they cannot control how their payments are applied, which could impact their financial standing with Fly To Fit.