What condition must be met before the assignment of Membership Contracts from the franchisee to Aira Fitness becomes effective?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of expiration or termination of the Franchise Agreement, and in order to secure continuity and stability of the operation of the Aira Fitness Business, Franchisee hereby sells, assigns, transfers and conveys to the Aira Fitness all of its rights, title and interest in and to all Membership Contracts; provided, however, such Assignment will not be effective unless and until the Franchise Agreement has expired or is terminated in accordance with the provisions thereof and Aira Fitness has delivered to Franchisee written notice of its acceptance of the assignment. In the event of such assignment, AIRA Fitness will assume no liability for monies owed or other liabilities relating to the Membership Contracts that have accrued prior to the effective date of the assignment.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, in the event of the expiration or termination of the Franchise Agreement, the franchisee sells, assigns, transfers, and conveys to Aira Fitness all rights, title, and interest in all Membership Contracts. However, this assignment is not effective until the Franchise Agreement has expired or is terminated according to its provisions. Additionally, Aira Fitness must deliver written notice to the franchisee indicating its acceptance of the assignment.
This means that if an Aira Fitness franchise closes, either through choice or termination, the membership contracts can be transferred to Aira Fitness to maintain business continuity. The franchisee must transfer the membership contracts, but the transfer is not finalized until Aira Fitness accepts the assignment in writing. This protects Aira Fitness by ensuring they only take on contracts they are willing to manage.
It's important to note that Aira Fitness assumes no liability for monies owed or other liabilities related to the Membership Contracts that accrued before the effective date of the assignment. This clarifies that the franchisee is responsible for any outstanding financial obligations to members up to the point when Aira Fitness takes over the contracts. A franchisee should be aware of this clause as it could have financial implications upon exiting the franchise system.