How does Fly To Fit define a 'transfer' of the franchise by the franchisee?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| than 5 consecutive days; three defaults in 12 months; cross-termination; charge or conviction of, or plea to a felony, or commission or accusation of an act that is reasonably likely to materially and unfavorably affect our brand; any other breach of franchise agreement which by its nature cannot be cured. MUDA: failure to meet development schedule; violation of franchise agreement or other agreement which gives us the right to terminate it. | ||
| i. Franchisee's obligations on termination/non renewal | FA: §§ 14.3 – 14.6 MUDA: none | Pay all amounts due; return Manual and proprietary items; notify phone, internet, and other providers and transfer service; cease doing business; remove identification; purchase option by us. |
| j. Assignment of agreement by franchisor | FA: § 15.1 MUDA: § 7 | Unlimited |
| k. "Transfer" by franchisee - defined | FA: Article 1 MUDA: Background Statement | For you (or any owner of your business) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the business, (ii) the franchise agreement, (iii) any direct or indirect ownership interest in the business, or (iv) control of the business. |
| l. Franchisor's approval of transfer by franchisee | FA: § 15.2 MUDA: § 7 | No transfers without our approval. |
| m. Conditions for franchisor's approval of transfer | FA: § 15.2 MUDA: none | Pay transfer fee; buyer meets our standards; buyer is not a competitor of ours; buyer and its owners sign our then-current franchise agreement and related documents (including personal guaranty); you've made all payments to us and are in compliance with all contractual requirements; buyer completes training program; you sign a general release; business complies with then-current system specifications (including remodel, if applicable). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 35–39)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, a 'transfer' by the franchisee is comprehensively defined. It includes any instance where the franchisee, or any owner of the business, voluntarily or involuntarily transfers, sells, or disposes of the business through a single transaction or a series of transactions.
This broad definition covers several scenarios. It includes the transfer of substantially all of the business's assets, the franchise agreement itself, any direct or indirect ownership interest in the business, or control of the business operations. This means that any significant change in ownership or control, whether through a direct sale, a phased transfer of assets, or any other means, would be considered a transfer under the terms of the Fly To Fit franchise agreement.
This definition is important for prospective franchisees because it clarifies the circumstances under which they would need to seek approval from Fly To Fit for a transfer. Given the requirement for franchisor approval, Fly To Fit retains significant control over who can operate a franchise within their system. Franchisees should be aware of these restrictions and approval processes, as outlined in the FDD, to ensure compliance and avoid potential breaches of the franchise agreement.