Is a Fly To Fit franchisee required to make renovations to the business as a condition of renewal?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.2 Successor Agreement. When the term of this Agreement expires, Franchisee may enter into a successor agreement for up to 2 additional periods of 5 years each, subject to the following conditions prior to each expiration:
- (i) Franchisee notifies Fly To Fit Franchise of the election to renew between 90 and 180 days prior to the end of the term;
- (ii) Franchisee (and its affiliates) are in compliance with this Agreement and all other agreements with Fly To Fit Franchise (or any of its affiliates) at the time of election and at the time of renewal;
- (iii) Franchisee has made or agrees to make (within a period of time acceptable to Fly To Fit Franchise) renovations and changes to the Business as Fly To Fit Franchise requires (including a Remodel, if applicable) to conform to the then-current System Standards;
- (iv) Franchisee and its Owners execute Fly To Fit Franchise's then-current standard form of franchise agreement and related documents (including personal guaranty), which may be materially different than this form (including, without limitation, higher and/or different fees), except that Franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in this Section;
- (v) Franchisee and each Owner executes a general release (on Fly To Fit Franchise's then-standard form) of any and all claims against Fly To Fit Franchise, its affiliates, and their respective owners, officers, directors, agents and employees.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, franchisees may be required to make renovations and changes to the business as a condition of renewal. Specifically, before each renewal for an additional term of 5 years, the franchisee must make or agree to make renovations and changes to the business, including a remodel if applicable, to conform to the then-current System Standards. These renovations must be completed within a period of time acceptable to Fly To Fit.
This requirement means that a Fly To Fit franchisee needs to be prepared to invest further in their business to keep it aligned with the current brand standards if they wish to renew their franchise agreement. This could involve significant costs, depending on the extent of the required renovations. The franchisee will need to factor in these potential future expenses when evaluating the overall profitability and long-term viability of the franchise.
It is also important to note that the new franchise agreement executed upon renewal may be materially different, potentially including higher or different fees. However, the franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in the agreement. This condition underscores the importance of carefully reviewing the then-current franchise agreement before deciding to renew, as the terms could be less favorable than the original agreement.