Does Fly To Fit require approval for any transfer of the franchise by the franchisee?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
sclosure 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; |
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 requires approval for any transfer of the franchise by the franchisee. The FDD states that franchisees cannot make transfers without Fly To Fit's approval. The document defines 'transfer' as any voluntary or involuntary action to transfer, sell, or dispose of business assets, the franchise agreement, ownership interest, or control of the business.
Fly To Fit also has a right of first refusal to acquire the franchisee's business if the franchisee wants to transfer their business to someone other than a co-owner, spouse, sibling, or child.
If a franchisee dies or becomes incapacitated, the FDD states that a new principal executive acceptable to Fly To Fit must be designated to operate the business. Additionally, the executor must transfer the business to an approved new owner within nine months.
To gain Fly To Fit's approval for a transfer, several conditions must be met. The franchisee must pay a transfer fee, and the buyer must meet Fly To Fit's standards and not be a competitor. The buyer and their owners must sign Fly To Fit's current franchise agreement and related documents, including a personal guaranty. The franchisee must have made all payments and be in compliance with all contractual requirements, and the buyer must complete the training program. Finally, the franchisee must sign a general release, and the business must comply with the current system specifications, including any required remodeling.