During arbitration or litigation involving Fly To Fit, what are the obligations of Fly To Fit Franchise and the franchisee?

According to Fly To Fit's 2024 Franchise Disclosure Document, both Fly To Fit Franchise and the franchisee are obligated to comply with the terms of the franchise agreement and fulfill their respective duties throughout any arbitration or litigation process, unless the agreement has been terminated. This means that regardless of any ongoing dispute, both parties must continue to operate as if the agreement is fully in effect, adhering to all standards, payment schedules, and operational requirements outlined in the agreement. This ensures business continuity and protects the interests of both parties while the dispute is being resolved.

This requirement to continue performing obligations during a dispute is a standard clause in franchise agreements. It prevents franchisees from ceasing operations or withholding payments as a tactic during arbitration or litigation, and it also prevents Fly To Fit from suspending support or services to the franchisee. However, it's important to note that this obligation ceases if the franchise agreement has already been terminated, which would occur under specific conditions outlined elsewhere in the FDD.

For a prospective Fly To Fit franchisee, this clause highlights the importance of carefully considering the financial and operational commitments required by the franchise agreement. Even if a dispute arises, the franchisee must be prepared to continue meeting these obligations, which could include ongoing royalty payments, marketing contributions, and adherence to brand standards. Failure to do so could result in further penalties or even termination of the franchise agreement. Franchisees should factor this ongoing obligation into their financial planning and risk assessment before investing in a Fly To Fit franchise.