What constitutes the 'Business' in the context of a Fly To Fit franchise agreement?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
our system with any prospective franchisee. | |
FRANCHISE AGREEMENT
This Agreement is made between Fly To Fit Franchise, LLC, a Delaware Limited Liability Company ("Fly To Fit Franchise"), and Franchisee effective as of the date signed by Fly To Fit Franchise (the "Effective Date").
Background Statement:
- A. Fly To Fit Franchise and its affiliate Fly To Fit Bungee Fitness, LLC, have created and own a system (the "System") for developing and operating a fitness studio offering bungee fitness classes, modified for all fitness levels avoiding joint stress, under the trade name "Fly To Fit".
- B. The System includes (1) methods, procedures, and standards for developing and operating a Fly To Fit business, (2) plans, specifications, equipment, signage and trade dress for Fly To Fit businesses, (3) particular products and services, (4) the Marks, (5) training programs, (6) business knowledge, (7) marketing plans and concepts, and (8) other mandatory or optional elements as determined by Fly To Fit Franchise from time to time.
- C. The parties desire that Fly To Fit Franchise license the Marks and the System to Franchisee for Franchisee to develop and operate a Fly To Fit business on the terms and conditions of this Agreement.
ARTICLE 1. DEFINITIONS
- "Action" means any action, suit, proceeding, claim, demand, governmental investigation, governmental inquiry, judgment or appeal thereof, whether formal or informal.
- "Approved Vendor" means a supplier, vendor, or distributor of Inputs which has been approved by Fly To Fit Franchise.
- "Business" means the Fly To Fit business owned by Franchisee and operated under this Agreement.
- "Competitor" means any business which offers products and/or services the same or similar to the franchise brand.
- "Confidential Information" means all non-public information of or about the System, Fly To Fit Franchise, and any Fly To Fit business, including all methods for developing and operating the Business, and all non-public plans, data, financial information, processes, vendor pricing, supply systems, marketing systems, formulas, techniques, designs, layouts, operating procedures, customer data, information and know-how.
- "Gross Sales" means the total dollar amount of all sales generated through the Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected by Franchisee, (iii) sales of used equipment not in the ordinary course of
business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
"Input" means any goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating the Business.
"Location" means the location stated on the Summary Page. If no location is stated on the Summary Page, then the Location will be determined in accordance with Section 6.1.
"Losses" includes (but is not limited to) all losses; damages; fines; charges; expenses; lost profits; reasonable attorneys' fees; travel expenses, expert witness fees; court costs; settlement amounts; judgments; loss of Fly To Fit Franchise's reputation and goodwill; costs of or resulting from delays; financing; costs of advertising material and media time/space and the costs of changing, substituting or replacing the same; and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described.
"Manual" means Fly To Fit Franchise's confidential Brand Standards Manual(s), including any supplements, additions, or revisions from time to time, which may be in any form or media.
"Marketing Fund" means the fund established (or which may be established) by Fly To Fit Franchise into which Marketing Fund Contributions are deposited.
"Marks" means the trade name and logo contained on the Summary Page, and all other trade names, trademarks, service marks and logos specified by Fly To Fit Franchise from time to time for use in a Fly To Fit business.
"Owner" means each person or entity which directly or indirectly owns or controls any equity of Franchisee. If Franchisee is an individual person, then "Owner" means Franchisee.
"Remodel" means a refurbishment, renovation, and remodeling of the Location to conform to the building design, exterior facade, trade dress, signage, fixtures, furnishings, equipment, decor, color schemes, presentation of the Marks, and other System Standards in a manner consistent with the image then in effect for a new Fly To Fit business.
"Required Vendor" means a supplier, vendor, or distributor of Inputs which Fly To Fit Franchise requires franchisees to use.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the 'Business' refers to the Fly To Fit business that the franchisee is authorized to develop and operate. This business operates under the Fly To Fit system, offering bungee fitness classes modified for all fitness levels while avoiding joint stress. The Fly To Fit system encompasses various elements, including methods, procedures, and standards for operating a Fly To Fit business, plans, specifications, equipment, signage, and trade dress, particular products and services, the Marks, training programs, business knowledge, and marketing plans and concepts.
The franchise agreement grants the franchisee the right to operate a Fly To Fit business solely at the specified location. The franchisee is obligated to develop, open, and operate the Fly To Fit business at this location for the entire term of the agreement. Fly To Fit also defines a protected territory, within which Fly To Fit will not establish or license another business selling similar goods or services under the Fly To Fit brand. However, Fly To Fit retains the right to operate or license businesses outside this territory, even if they impact the franchisee's business.
Fly To Fit retains significant control over the System and the Marks, with all goodwill associated with the Marks, including any goodwill arising from the franchisee's operation of the Business, inuring to the exclusive benefit of Fly To Fit. The franchisee's use of trademarks, service marks, or logos is restricted to only the Marks specified by Fly To Fit, used in the manner required by Fly To Fit. Fly To Fit can also modify or discontinue any Marks used under the System, and the franchisee must comply with these changes at their own expense.
Fly To Fit also has the right to temporarily cease operations of the Business if it discovers any aspect that constitutes an imminent danger to health or safety. Furthermore, all customer data and other non-public data generated by the Business is considered Confidential Information and is exclusively owned by Fly To Fit, although it is licensed back to the franchisee for use in connection with the Business during the term of the agreement. Franchisees must also disclose any innovations related to the Business to Fly To Fit, which will automatically own these innovations and have the right to incorporate them into the System without compensating the franchisee.