Under the Fly To Fit agreement, who are considered 'Restricted Parties'?

According to Fly To Fit's 2024 Franchise Disclosure Document, the term 'Restricted Parties' refers to the franchisee, any owner of the franchise, and any spouse of an owner. This definition is important because these individuals are subject to certain restrictions, particularly concerning non-compete covenants, both during the term of the franchise agreement and for a period after the agreement expires or is terminated. These restrictions are designed to protect Fly To Fit's business interests and prevent franchisees or related parties from using the knowledge and experience gained from operating a Fly To Fit franchise to compete against the brand.

The non-compete covenants outline specific limitations on the activities of Restricted Parties. During the term of the agreement, they are prohibited from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor. After the agreement ends, these restrictions continue for two years within a five-mile radius of the franchisee's territory or the territory of any other Fly To Fit business operating at the time of termination or transfer.

These non-compete obligations are significant for potential Fly To Fit franchisees. They must understand that these restrictions will impact their ability, and the ability of their owners and their spouses, to engage in competitive business activities both during and after the franchise agreement. Franchisees should carefully consider these limitations and how they might affect their future business opportunities. It is also important to note that if a Restricted Party fails to comply with these obligations, the restrictive period will be extended by one day for each day of noncompliance, further emphasizing the importance of adhering to these covenants.