Does Fly To Fit have any purchase options related to the franchisee's business upon termination?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| than 5 consecutive days; three defaults in 12 months; cross-termination; charge or conviction of, or plea to a felony, or commission or accusation of an act that is reasonably likely to materially and unfavorably affect our brand; any other breach of franchise agreement which by its nature cannot be cured. MUDA: failure to meet development schedule; violation of franchise agreement or other agreement which gives us the right to terminate it. | ||
| i. Franchisee's obligations on termination/non renewal | FA: §§ 14.3 – 14.6 MUDA: none | Pay all amounts due; return Manual and proprietary items; notify phone, internet, and other providers and transfer service; cease doing business; remove identification; purchase option by us. |
| j. Assignment of agreement by franchisor | FA: § 15.1 MUDA: § 7 | Unlimited |
| k. "Transfer" by franchisee - defined | FA: Article 1 MUDA: Background Statement | For you (or any owner of your business) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the business, (ii) the franchise agreement, (iii) any direct or indirect ownership interest in the business, or (iv) control of the business. |
| l. Franchisor's approval of transfer by franchisee | FA: § 15.2 MUDA: § 7 | No transfers without our approval. |
| m. Conditions for franchisor's approval of transfer | FA: § 15.2 MUDA: none | Pay transfer fee; buyer meets our standards; buyer is not a competitor of ours; buyer and its owners sign our then-current franchise agreement and related documents (including personal guaranty); you've made all payments to us and are in compliance with all contractual requirements; buyer completes training program; you sign a general release; business complies with then-current system specifications (including remodel, if applicable). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 35–39)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, Fly To Fit does retain a purchase option regarding the franchisee's business upon termination. Item 17 details the franchisee's obligations upon termination or non-renewal of the franchise agreement, stating that the franchisee must adhere to several requirements, including a purchase option exercisable by Fly To Fit.
This means that upon termination or non-renewal of the franchise agreement, Fly To Fit has the option to purchase the franchisee's business. The specific terms and conditions of this purchase option are detailed in Sections 14.3 to 14.6 of the Franchise Agreement. A prospective franchisee should carefully review these sections to understand the circumstances under which Fly To Fit may exercise this option, the valuation method used to determine the purchase price, and any other relevant terms.
In addition to the purchase option, the franchisee is also obligated to pay all amounts due, return the Manual and proprietary items, notify and transfer service from phone, internet, and other providers, cease doing business, and remove any identification indicating affiliation with Fly To Fit. Understanding these obligations is crucial for any prospective franchisee to assess the potential financial and operational implications of termination or non-renewal.