What is the consequence if an Aira Fitness franchisee fails to pay any amount demanded by Franchisor's Affiliate pursuant to Section 6(a) of the lease agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
onal property (together with all attachments, replacements, parts, substitutions, additions, repairs, accessions and accessories, incorporated therein and/or affixed, thereto) (the "Equipment") described in any Schedule to Equipment Lease (a "Schedule") subsequently executed by the parties hereto and incorporating the terms of this Equipment Lease by reference therein (the "Lease").
- (b) The Equipment is and shall at all times be and remain the sole and exclusive personal property of Franchisor's Affiliate, and notwithstanding any trade-in or down payment by Franchisee or on its behalf with respect to the Equipment, Franchisee shall have no right, title or interest therein or thereto except as to the use thereof subject to the terms or conditions of this Lease.
- 3. Term and Rent; Purchase Option. Franchisee shall pay as monthly rent for use of the Equipment the amount described in Paragraph 1(h) above on the 1st day of each month following the Commencement Date. If any rental shall be unpaid for more than five (5) days after the
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, if a franchisee fails to pay rent for equipment more than five days after the due date, they will be required to pay a late fee. This late fee is either $100.00 or 18% of the unpaid amount, whichever is greater. However, the late fee will not exceed the maximum lawful charges. The franchise agreement emphasizes that timely payment of rent is critical.
This clause in the Aira Fitness agreement highlights the importance of managing cash flow and adhering to payment schedules. Franchisees need to ensure they have sufficient funds to cover the monthly equipment rental fees to avoid incurring these additional charges. The potential for a late fee of 18% of the unpaid amount, though capped by law, could significantly increase the cost of the lease if not managed properly.
Many franchise systems have similar late payment penalties, but the specific amounts and terms can vary. Prospective Aira Fitness franchisees should carefully review the equipment lease agreement and understand all payment obligations and associated penalties. They should also factor these potential late fees into their financial projections to ensure they can maintain compliance with the lease terms.