If Fly To Fit Franchise grants consent to a transfer, can they impose conditions?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
eement 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, if a franchisee wants to transfer their franchise, they must first get Fly To Fit's consent. Fly To Fit can impose certain conditions when granting this consent. These conditions can include requiring a transfer fee of $10,000 plus any broker fees and out-of-pocket costs that Fly To Fit incurs.
Fly To Fit can also require that the proposed new franchisee meet the then-current standards for new franchisees and complete Fly To Fit's application process. The potential franchisee must not be a competitor. The new franchisee may also be required to execute Fly To Fit's current franchise agreement, which may have materially different provisions than the original agreement, although they won't have to pay an initial franchise fee. All owners of the proposed franchisee must provide a guaranty.
Additionally, Fly To Fit can require that the franchisee has paid all outstanding monetary obligations to Fly To Fit, its affiliates, and any lessors, vendors, suppliers, or lenders associated with the business. The franchisee must not be in default or breach of the agreement. Fly To Fit may also require the proposed new franchisee, its owners, and employees to undergo training. The franchisee, its owners, and the new franchisee and its owners may also be required to execute a general release of Fly To Fit in a form satisfactory to Fly To Fit. Finally, the business must fully comply with all of Fly To Fit's most recent System Standards.