What constitutes an Event of Default for Aira Fitness if the debtor makes a written statement about their inability to pay debts?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
ed at, located on or affixed to the Aira Fitness Business operated by Debtor, and all fitness equipment, other equipment, fixtures, furniture, inventory and supplies located at Debtor Aira Fitness Business, whether now owned or hereafter acquired by Debtor (the "Collateral").
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
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, an "Event of Default" occurs if the franchisee, referred to as the Debtor, makes a written statement indicating their inability to pay debts as they become due. This is outlined within the definitions of events that trigger a default under the security agreement.
This clause is significant because it means that if an Aira Fitness franchisee formally acknowledges in writing their financial struggles to meet debt obligations, Aira Fitness can declare the franchisee in default. This declaration allows Aira Fitness to exercise its rights as a secured party, including accelerating all amounts payable and potentially seizing the Aira Fitness Business's assets.
For a prospective Aira Fitness franchisee, this highlights the importance of maintaining financial stability and carefully considering any written communication regarding their ability to pay debts. It also underscores the need to seek professional financial advice if facing financial difficulties to avoid triggering an Event of Default. Franchisees should be aware of the implications of any written statements they make regarding their financial situation, as it could lead to the loss of their franchise.