Can Aira Fitness compromise or renew the Franchise Agreement without affecting the Guarantor's liability?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Attachment C to the Franchise Agreement
PERSONAL GUARANTEE AND AGREEMENT TO BE BOUND PERSONALLY BY THE TERMS AND CONDITIONS OF THE FRANCHISE AGREEMENT
In consideration of the execution of the Franchise Agreement by us, and for other good and valuable consideration, the undersigned, for themselves, their heirs, successors, and assigns, do jointly, individually and severally hereby become surety and guarantor for the payment of all amounts and the performance of the covenants, terms and conditions in the Franchise Agreement, to be paid, kept and performed by the franchisee, including without limitation the arbitration and other dispute resolution provisions of the Agreement.
Further, the undersigned, individually and jointly, hereby agree to be personally bound by each and every condition and term contained in the Franchise Agreement, including but not limited to the non-compete provisions in paragraph 11.D, the dispute resolution provision in Section 13, and agree that this Personal Guarantee will be construed as though the undersigned and each of them executed a Franchise Agreement containing the identical terms and conditions of this Franchise Agreement.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
The 2025 Aira Fitness Franchise Disclosure Document includes an attachment titled "PERSONAL GUARANTEE AND AGREEMENT TO BE BOUND PERSONALLY BY THE TERMS AND CONDITIONS OF THE FRANCHISE AGREEMENT". This agreement stipulates that the guarantor is bound by the terms of the Franchise Agreement. Specifically, the guarantor agrees to be personally bound by each condition and term in the Franchise Agreement, including non-compete and dispute resolution provisions. This personal guarantee is construed as if the guarantor had executed a Franchise Agreement with identical terms.
Regarding franchise agreement renewals, the FDD states that to renew the franchise, the franchisee and their owners and guarantors must execute a general release in a form prescribed by Aira Fitness, in favor of Aira Fitness and its affiliates. This release, however, cannot be inconsistent with any state law regulating franchising.
In the case of an installment sale where Aira Fitness has consented to the franchisee or any owner retaining a security interest or other financial interest in the Franchise Agreement or the business, the owners and guarantors are obligated to guarantee performance under the agreement until the final close of the installment sale or the termination of such interest.
Therefore, while the FDD does not explicitly address whether Aira Fitness can compromise or renew the Franchise Agreement without affecting the guarantor's liability, it indicates that the guarantor's obligations are tied to the franchisee's performance and the terms of the Franchise Agreement, including renewals and transfers. Any modifications or releases would likely require the guarantor's involvement and consent, as evidenced by the required general release upon renewal.