Does Fly To Fit disclose the existence of covenants restricting competition in its franchise disclosure documents?

According to Fly To Fit's 2024 Franchise Disclosure Document, the Franchise Agreement contains a covenant not to compete that extends beyond the termination of the franchise. However, the disclosure notes that this provision may not be enforceable under California law. This means that while Fly To Fit includes a non-compete clause in its standard agreement, its enforceability can vary by jurisdiction.

For prospective franchisees, this is an important consideration. A non-compete agreement could significantly restrict your ability to operate a similar business after your franchise agreement with Fly To Fit ends. The enforceability issues, particularly in states like California, might offer some protection, but this should be verified with legal counsel.

Furthermore, the North Dakota Addendum to the Disclosure Document indicates that the Securities Commissioner has deemed restrictive covenants in franchise agreements as potentially unfair, unjust, or inequitable to North Dakota franchisees if the disclosure does not explicitly state that such covenants are subject to North Dakota Century Code Section 9-08-06. This suggests that Fly To Fit franchisees in North Dakota may have additional protections against overly broad or restrictive non-compete clauses.

Prospective franchisees should seek legal advice to understand the specific enforceability of the non-compete clause in their state and how it might affect their future business opportunities after leaving the Fly To Fit franchise system. They should also inquire about any specific state addenda or riders that may modify the standard franchise agreement terms regarding non-compete provisions.