What conditions trigger the 'Right to Operate Upon Default' fee for an Aira Fitness franchise, and what is the maximum percentage of gross sales that can be charged?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Right to Operate Upon Default | Up to 15% of Gross Sales, plus actual out of-pocket costs and expenses incurred. | As incurred. | In the event that you have not cured a default under the Franchise Agreement within 14 days after receipt of a written notice of default, our agent or other representative designated by us may take over, control and operate the Franchised Business. |
Source: Item 6 — **OTHER FEES (FDD pages 18–24)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the 'Right to Operate Upon Default' fee is triggered when a franchisee fails to correct a default under the Franchise Agreement within 14 days after receiving written notice of the default. If this occurs, Aira Fitness's agent or representative may take over, control, and operate the franchised business.
In such a scenario, Aira Fitness can charge a fee of up to 15% of the gross sales, in addition to any actual out-of-pocket costs and expenses incurred during the period they operate the business. This fee is due as incurred.
This provision is important for prospective franchisees to understand, as it outlines the financial implications of failing to meet the obligations outlined in the Franchise Agreement. The 14-day cure period is relatively short, so franchisees need to be prepared to act quickly if they receive a notice of default. The potential for Aira Fitness to take over operations and charge 15% of gross sales, plus expenses, could significantly impact the profitability of the franchise during the period of intervention.