According to the Aira Fitness agreement, what constitutes an 'Event of Default'?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
3. Default.
- 3.1. Definitions. The term "Event of Default" means the occurrence and continuation of any one (1) or more of the following events:
- (a) any failure of Debtor promptly and faithfully to pay, observe and perform, when due, any of the Obligations;
- (b) if Debtor becomes insolvent, commits an act of bankruptcy, files a voluntary petition in bankruptcy, or an involuntary petition in bankruptcy is filed, or a permanent or temporary receiver or trustee for the Aira Fitness Business, or all or substantially all of the Debtor's property, is appointed by any court and such appointment is not actively opposed through legal action, or Debtor makes an assignment or arrangement for the benefit of creditors, or calls a meeting of creditors, or Debtor makes a written statement to the effect that he or it is unable to pay his or its debts as they become due, or a levy of execution is made upon Debtor, or an attachment or lien outstanding with respect to the Aira Fitness Business for thirty (30) days, unless the attachment or lien is being duly contested in good faith by Debtor and Secured Party is advised in writing
- (c) if Debtor loses possession or the right of possession of all or a significant part of the Aira Fitness Business through condemnation or casualty and the Aira Fitness Business is not relocated or reopened as required by the Franchise Agreement;
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, an 'Event of Default' is defined as the occurrence and continuation of any one or more specific events. These events include failing to promptly pay, observe, and perform any of the obligations when due. This means that if a franchisee does not meet their financial or operational responsibilities as outlined in the franchise agreement, it can be considered an event of default.
Additional events that constitute default include scenarios where the franchisee becomes insolvent, commits an act of bankruptcy, files for bankruptcy (either voluntarily or involuntarily), or has a receiver or trustee appointed for the Aira Fitness business. It also covers situations where the franchisee makes an assignment for the benefit of creditors, calls a meeting of creditors, or makes a written statement indicating an inability to pay debts. Furthermore, if a levy of execution is made upon the franchisee or an attachment or lien remains outstanding with respect to the Aira Fitness business for thirty days (unless contested in good faith), it is considered an event of default.
Finally, an event of default can occur if the franchisee loses possession or the right of possession of a significant part of the Aira Fitness business due to condemnation or casualty, and the business is not relocated or reopened as required by the Franchise Agreement. These detailed conditions provide a comprehensive overview of the circumstances under which Aira Fitness can declare a franchisee to be in default, which can ultimately lead to termination of the franchise agreement.