What happens if a Fly To Fit franchisee loses possession of the Location?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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- appoints Fly To Fit Franchise, with full power of substitution, as its true and lawful attorney-in-fact, which appointment is coupled with an interest; to execute such directions and authorizations as may be necessary or appropriate to accomplish the foregoing; and
- (iv) cease doing business under any of the Marks.
- 14.4 Remove Identification. Within 30 days after termination or expiration, Franchisee shall at its own expense "de-identify" the Location so that it no longer contains the Marks, signage, or any trade dress of a Fly To Fit business, to the reasonable satisfaction of Fly To Fit Franchise. Franchisee shall comply with any reasonable instructions and procedures of Fly To Fit Franchise for de-identification. If Franchisee fails to do so within 30 days after this Agreement expires or is terminated, Fly To Fit Franchise may enter the Location to remove the Marks and de-identify the Location. In this event, Fly To Fit Franchise will not be charged with trespass nor be accountable or required to pay for any assets removed or altered, or for any damage caused by Fly To Fit Franchise.
- 14.5 Liquidated Damages. If Fly To Fit Franchise terminates this Agreement based upon Franchisee's default (or if Franchisee purports to terminate this Agreement except as permitted under Section 14.1), then within 10 days thereafter Franchisee shall pay to Fly To Fit Franchise a lump sum (as liquidated damages and not as a penalty) calculated as follows: (x) the average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise under this Agreement for the 12-month period preceding the date on which Franchisee ceased operating the Business; multiplied by (y) the lesser of (1) 24 or (2) the number of months remaining in the then-current term of this Agreement. If Franchisee had not operated the Business for at least 12 months, then (x) will equal the average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise during the period that Franchisee operated the Business. The "average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise" shall not be discounted or adjusted due to any deferred or reduced Royalty Fees and Marketing Fund Contributions set forth in an addendum to this Agreement, unless this Section 14.5 is specifically amended in such addendum.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
Based on the 2024 Fly To Fit Franchise Disclosure Document, the franchise agreement grants the franchisee the right to operate a Fly To Fit business solely at the specified location. The franchisee is obligated to develop, open, and operate the business at that location for the entire term of the agreement. If the franchisee loses possession of the location due to termination or expiration of the agreement, they are required to 'de-identify' the location within 30 days, removing all Fly To Fit marks, signage, and trade dress to the franchisor's satisfaction.
If the franchisee fails to de-identify the location within the specified timeframe, Fly To Fit has the right to enter the premises to remove the marks and de-identify the location themselves. In such cases, Fly To Fit will not be held liable for trespass or required to compensate the franchisee for any assets removed, altered, or any damages caused during the de-identification process. This clause protects Fly To Fit's brand identity and ensures that a former franchisee cannot continue to operate under the Fly To Fit name or appearance after the agreement ends.
Furthermore, if Fly To Fit terminates the agreement due to the franchisee's default, the franchisee must pay liquidated damages to Fly To Fit within 10 days. These damages are calculated based on the average Royalty Fees and Marketing Fund Contributions owed during the 12-month period preceding the cessation of business operations, multiplied by either 24 or the number of months remaining in the agreement term, whichever is lesser. This provision serves as a financial protection for Fly To Fit in the event of a franchisee's breach of contract leading to termination.