What constitutes an 'Event of Default' for an Aira Fitness business, according to the agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
3. Default.
- 3.1. Definitions. The term "Event of Default" means the occurrence and continuation of any one (1) or more of the following events:
- (a) any failure of Debtor promptly and faithfully to pay, observe and perform, when due, any of the Obligations;
- (b) if Debtor becomes insolvent, commits an act of bankruptcy, files a voluntary petition in bankruptcy, or an involuntary petition in bankruptcy is filed, or a permanent or temporary receiver or trustee for the Aira Fitness Business, or all or substantially all of the Debtor's property, is appointed by any court and such appointment is not actively opposed through legal action, or Debtor makes an assignment or arrangement for the benefit of creditors, or calls a meeting of creditors, or Debtor makes a written statement to the effect that he or it is unable to pay his or its debts as they become due, or a levy of execution is made upon Debtor, or an attachment or lien outstanding with respect to the Aira Fitness Business for thirty (30) days, unless the attachment or lien is being duly contested in good faith by Debtor and Secured Party is advised in writing
- (c) if Debtor loses possession or the right of possession of all or a significant part of the Aira Fitness Business through condemnation or casualty and the Aira Fitness Business is not relocated or reopened as required by the Franchise Agreement;
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, an "Event of Default" is defined as the occurrence and continuation of any one or more of several events. These include failure to promptly pay, observe, and perform any of the obligations when due. This means franchisees must adhere to all financial and operational requirements outlined in their agreements with Aira Fitness.
Additional events of default include insolvency, acts of bankruptcy, or the appointment of a receiver or trustee for the Aira Fitness business. Furthermore, making an assignment for the benefit of creditors or admitting inability to pay debts as they become due, or facing a levy of execution, attachment, or lien on the Aira Fitness Business for thirty days also constitute default events, unless the franchisee is contesting the issue in good faith and has advised the Secured Party in writing. Losing possession or the right of possession of a significant part of the Aira Fitness Business due to condemnation or casualty, without relocating or reopening as required by the Franchise Agreement, also triggers an event of default.
These stipulations are important for prospective Aira Fitness franchisees to understand, as they highlight the financial and operational responsibilities necessary to maintain a compliant franchise. Failure to meet these obligations can lead to serious consequences, including potential termination of the franchise agreement. Therefore, franchisees must ensure they have the resources and capabilities to meet these requirements before entering into the agreement.