Is it a condition of transfer that the proposed assignee of a Fly To Fit franchise not be a Competitor?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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ARTICLE 15. TRANSFERS
- 15.1 By Fly To Fit Franchise. Fly To Fit Franchise may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Fly To Fit Franchise may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Fly To Fit Franchise entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Fly To Fit Franchise at least 60 days prior notice of the proposed Transfer, and without obtaining Fly To Fit Franchise's consent. In granting any such consent, Fly To Fit Franchise may impose conditions, including, without limitation, the following:
- (i) Fly To Fit Franchise receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Fly To Fit Franchise;
- (ii) the proposed assignee and its owners have completed Fly To Fit Franchise's franchise application processes, me
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, one of the conditions that Fly To Fit may impose when a franchisee seeks to transfer their franchise is that the proposed assignee not be a competitor. This means Fly To Fit has the right to refuse a transfer to an entity that is considered a competitor.
This condition is part of a broader set of requirements that a potential buyer must meet to be approved as a franchisee. These requirements include completing Fly To Fit's franchise application process, meeting the then-applicable standards for new franchisees, and being approved by Fly To Fit. The proposed assignee must also execute Fly To Fit's current form of franchise agreement, which may contain materially different provisions, although they will not be required to pay an initial franchise fee.
Additionally, the franchisee must pay a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Fly To Fit. All monetary obligations to Fly To Fit and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business, must be paid. The proposed assignee, along with their owners and employees, may also be required to undergo training. These conditions collectively ensure that Fly To Fit maintains control over who becomes a franchisee and protects its brand and system standards.