For Aira Fitness, what conditions apply to creating a security interest in the transferred property?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
e proposed purchase or other transfer agreement) or other required information. The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer is subject to our prior written approval, which approval will not be withheld unreasonably.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, creating a security interest related to a transfer is subject to specific conditions. A franchisee cannot retain or create a security interest without Aira Fitness's prior written consent. This consent is granted only under conditions that Aira Fitness finds acceptable.
Furthermore, any agreement used during a transfer, including those involving security interests, requires Aira Fitness's prior written approval, which, according to the FDD, will not be unreasonably withheld. This indicates that while Aira Fitness maintains control over security interests, they are expected to apply reasonable standards in their decision-making process.
In the event of an installment sale where the franchisee or an owner retains a security interest, the franchisee, owner, and any guarantors are obligated to guarantee performance under the Franchise Agreement until the final closure of the installment sale or the termination of the security interest. This ensures that Aira Fitness's interests are protected even after the transfer of the franchise, as the original franchisee remains responsible for upholding the agreement's terms.