What rights does Fly To Fit Franchise retain in addition to liquidated damages?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
this Agreement, unless this Section 14.5 is specifically amended in such addendum. Franchisee acknowledges that a precise calculation of the full extent of Fly To Fit Franchise's damages under these circumstances is difficult to determine and the method of calculation of such damages as set forth in this Section is reasonable. Franchisee's payment to Fly To Fit Franchise under this Section will be in lieu of any direct monetary damages that Fly To Fit Franchise may incur as a result of Fly To Fit Franchise's loss of Royalty Fees and Marketing Fund Contributions that would have been owed to Fly To Fit Franchise after the date of termination; however, such payment shall be in addition to all damages and other amounts arising under Section 14.3 and Section 14.4, Fly To Fit Franchise's right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which Fly To Fit Franchise is entitled under this Agreement. Except as provided in this Section, Franchisee's payment of this lump sum shall be in addition to any other right or remedy that Fly To Fit Franchise may have under this Agreement or otherwise.
- 14.6 Purchase Option. When this Agreement expires or is terminated, Fly To Fit Franchise will have the right (but not the obligation) to purchase any or all of the assets related to the Business, and/or to require Franchisee to assign its lease or sublease to Fly To Fit Franchise. To exercise this option, Fly To Fit Franchise must notify Franchisee no later than 30 days after this Agreement
expires or is terminated. The purchase price for all assets that Fly To Fit Franchise elects to purchase will be the lower of (i) the book value of such assets as declared on Franchisee's last filed tax returns or (ii) the fair market value of the assets. If the parties cannot agree on fair market value within 30 days after the exercise notice, the fair market value will be determined by an independent appraiser reasonably acceptable to both parties. The parties will equally share the cost of the appraisal. Fly To Fit Franchise's purchase will be of assets only (free and clear of all liens), and the purchase will not include any liabilities of Franchisee. The purchase price for assets will not include any factor or increment for any trademark or other commercial symbol used in the business, the value of any intangible assets, or any goodwill or "going concern" value for the Business. Fly To Fit Franchise may withdraw its exercise of the purchase option at any time before it pays for the assets. Franchisee will sign a bill of sale for the purchased assets and any other transfer documents reasonably requested by Fly To Fit Franchise. If Fly To Fit Franchise exercises the purchase option, Fly To Fit Franchise may deduct from the purchase price: (a) all amounts due from Franchisee; (b) Franchisee's portion of the cost of any appraisal conducted hereunder;
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, in addition to liquidated damages, Fly To Fit retains several rights upon termination of the franchise agreement. These rights are designed to protect Fly To Fit's brand, system standards, and financial interests.
First, Fly To Fit has the right to damages and other amounts arising under Section 14.3 and Section 14.4, the right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which Fly To Fit is entitled under the Franchise Agreement. Fly To Fit also has the option to purchase the assets of the business and/or require the franchisee to assign the lease to Fly To Fit. This purchase option must be exercised within 30 days of the agreement's expiration or termination.
Furthermore, Fly To Fit retains ownership of all customer data and non-public data generated by the business, licensing it back to the franchisee only for the term of the agreement. Fly To Fit also automatically owns all ideas, plans, improvements, concepts, methods and techniques relating to the Business conceived or developed by Franchisee, its employees, agents or contractors. These rights ensure that Fly To Fit maintains control over critical business information and innovations developed within the franchise system, even after a franchise agreement ends.
Finally, Fly To Fit can discontinue supplying products or services to a franchisee in default, and can request third-party vendors to do the same. These rights, in addition to any other right or remedy available to Fly To Fit, provide Fly To Fit with broad protection and control in the event of a franchisee's default or termination, safeguarding the integrity and value of the Fly To Fit brand and system.