What happens if a Fly To Fit franchisee or owner is convicted of a felony?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
filiate) terminates any other agreement with Franchisee (or any affiliate) due to the breach of such other agreement by Franchisee (or its affiliate) (provided that termination of a Multi-Unit Development Agreement with Franchisee or its affiliate shall not give Fly To Fit Franchise the right to terminate this Agreement);
- (xiii) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
- (xiv) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in Fly To Fit Franchise's opinion is reasonably likely to materially and unfavorably affect the Fly To Fit brand.
- 14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
- (i) pay all amounts owed to Fly To Fit Franchise based on the operation of the Business through the effective date of termination or expiration;
- (ii) return to Fly To Fit Franchise all copies of the Manual, Confidential Information and any and all other materials provided by Fly To Fit Franchise to Franchisee or created by a third party for Franchisee relating to the operation of the Business, and all items containing any Marks, copyrights, and other proprietary items;
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the franchise agreement can be terminated if a franchisee or any owner is charged with, pleads guilty or no-contest to, or is convicted of a felony. This is a significant clause for prospective franchisees to consider. A felony conviction of the franchisee or any owner can lead to the termination of the franchise agreement by Fly To Fit.
Upon termination of the agreement, the franchisee must fulfill several obligations. These include paying all outstanding amounts owed to Fly To Fit, returning all copies of the manual, confidential information, and any other materials related to the business operation. The franchisee must also delete all confidential and proprietary materials from electronic devices and notify relevant entities about the termination of their right to use any numbers, addresses, domain names, directories, and listings associated with Fly To Fit's marks, authorizing their transfer to Fly To Fit or a new franchisee.
This provision highlights the importance of maintaining a clean legal record for both the franchisee and any owners involved in the Fly To Fit business. Franchisees should understand that any felony-related legal issues could jeopardize their investment and their right to operate the franchise. This is a fairly standard clause in franchise agreements, as franchisors want to protect their brand and reputation from any negative impact due to criminal activity by franchisees or owners.