Does the MUDA agreement create an obligation or an option for Fly To Fit franchisees?

According to Fly To Fit's 2024 Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) provides the franchisee with an option, not an obligation, to develop multiple Fly To Fit businesses. Specifically, the document states that the franchisee's commitment to develop Fly To Fit businesses is "in the nature of an option only." This means that while the franchisee agrees to a development schedule, they are not penalized for lost future revenues or profits if the MUDA is terminated due to the franchisee's default. The franchisee also has the right to terminate the MUDA at any time.

However, the franchisee's right to develop each Fly To Fit franchise after the first store is subject to certain conditions. The franchisee must demonstrate sufficient financial and organizational capacity to develop, open, operate, and manage each additional Fly To Fit business, as determined by Fly To Fit. Additionally, the franchisee must be in full compliance with all brand requirements at its open Fly To Fit businesses and not be in default under any Franchise Agreement or any other agreement with Fly To Fit.

It's important to note that while the MUDA provides a framework for future development, it does not automatically grant the franchisee the right to open additional Fly To Fit businesses. For each additional franchise, the franchisee must execute Fly To Fit's then-current standard form of franchise agreement. The MUDA simply sets the stage for potential future expansion, subject to the franchisee's performance and Fly To Fit's approval.