What is the dependency between signing a MUDA and the right to develop additional Fly To Fit outlets?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the right to establish a mutually-agreed number of additional outlets on a mutually-agreed schedule. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have sufficient financial and organizational capacity to develop, open, operate, and manage each additional Fly To Fit business, (3) you must be in compliance with all brand requirements at your open Fly To Fit business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. You are not obligated to develop additional outlets under the MUDA, and you may terminate it any time without penalty. If you do not meet your development schedule in the MUDA, we have the right to terminate your right to develop additional outlets.
Source: Item 12 — TERRITORY (FDD pages 30–31)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, a franchisee does not have the right to establish additional franchised outlets unless they sign a Multi-Unit Development Agreement (MUDA). If a MUDA is signed, the franchisee gains the right to establish a mutually agreed number of additional outlets based on a mutually agreed schedule.
Under the MUDA, the franchisee's right to develop additional outlets is contingent upon several factors. First, they must comply with the development schedule outlined in the MUDA. Second, they need to demonstrate sufficient financial and organizational capacity to successfully develop, open, operate, and manage each additional Fly To Fit business. Third, the franchisee must maintain compliance with all brand requirements at their existing Fly To Fit businesses. Finally, they must not be in default under any other agreement with Fly To Fit.
Fly To Fit retains approval rights over the location of future sites and territories, ensuring that the then-current standards for sites and territories are met. While the franchisee is not obligated to develop additional outlets under the MUDA and can terminate it at any time without penalty, Fly To Fit reserves the right to terminate the franchisee's right to develop additional outlets if the development schedule is not met. The initial franchise fee is to be paid upon the execution of the MUDA and is non-refundable.