Is a Fly To Fit franchisee allowed to transfer their franchise without Fly To Fit Franchise's consent?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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ARTICLE 15. TRANSFERS
- 15.1 By Fly To Fit Franchise. Fly To Fit Franchise may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Fly To Fit Franchise may undergo a change in ownership and/or control, without 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
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, a franchisee cannot transfer their franchise agreement without the franchisor's consent. Fly To Fit requires at least 60 days' prior notice before any proposed transfer. This requirement is in place because Fly To Fit has relied on the franchisee's specific skills and abilities when entering into the agreement.
Fly To Fit may impose conditions when granting consent for a transfer. These conditions include receiving a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Fly To Fit. The proposed assignee must also meet Fly To Fit's standards for new franchisees, complete the franchise application process, and be approved by Fly To Fit. Additionally, the assignee cannot be a competitor of Fly To Fit.
The assignee must execute Fly To Fit's current franchise agreement, which may contain different provisions than the original agreement, although they won't be required to pay an initial franchise fee. All owners of the proposed assignee must provide a guaranty. The franchisee must have paid all outstanding obligations to Fly To Fit and its affiliates, as well as to any lessors, vendors, suppliers, or lenders, and not be in default of any agreements. The proposed assignee and their personnel must undergo any required training, and both parties must execute a general release of Fly To Fit. Finally, the business must fully comply with Fly To Fit's most recent System Standards.