Can Fly To Fit Franchise impose conditions on granting consent to a transfer?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
hout 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, meet Fly To Fit Franchise's then-applicable standards for new franchisees, and have been approved by Fly To Fit Franchise as franchisees;
- (iii) the proposed assignee is not a Competitor;
- (iv) the proposed assignee executes Fly To Fit Franchise's then-current form of franchise agreement and any related documents, which form may contain
- materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed assignee provide a guaranty in accordance with Section 2.5;
- (vi) Franchisee has paid all monetary obligations to Fly To Fit Franchise and its affiliates, and to any lessor, vendor, supplier, or lender to the Business, and Franchisee is not otherwise in default or breach of this Agreement or of any other obligation owed to Fly To Fit Franchise or its affiliates;
- (vii) the proposed assignee and its owners and employees undergo such training as Fly To Fit Franchise may require;
- (viii) Franchisee, its Owners, and the transferee and its owners execute a general release of Fly To Fit Franchise in a form satisfactory to Fly To Fit Franchise;
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, Fly To Fit Franchise can impose conditions when granting consent to a transfer of the franchise. The franchisee must provide Fly To Fit Franchise with at least 60 days' notice before any proposed transfer and must obtain Fly To Fit Franchise's consent.
Fly To Fit Franchise can impose several conditions when granting consent. These conditions include receiving a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Fly To Fit Franchise. The proposed assignee must complete Fly To Fit Franchise's franchise application process, meet the then-applicable standards for new franchisees, and be approved by Fly To Fit Franchise. The proposed assignee must not be a competitor. The proposed assignee must execute Fly To Fit Franchise's then-current form of franchise agreement and related documents, which may contain materially different provisions, although the assignee won't be required to pay an initial franchise fee.
Additional conditions include all owners of the proposed assignee providing a guaranty. The franchisee must have paid all monetary obligations to Fly To Fit Franchise and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business, and not be in default or breach of any agreement. The proposed assignee, its owners, and employees must undergo any training that Fly To Fit Franchise may require. The franchisee, its owners, and the transferee and its owners must execute a general release of Fly To Fit Franchise in a form satisfactory to Fly To Fit Franchise. Finally, the business must fully comply with all of Fly To Fit Franchise's most recent System Standards.