What constitutes a failure to pay other payments besides rent that would trigger an Event of Default for an Aira Fitness franchise?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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11. YOUR OTHER OBLIGATIONS; NON-COMPETE COVENANTS
- A. Payment of Debts. You agree to pay promptly when due: (i) all payments, obligations, assessments and taxes due and payable to us and our affiliates, suppliers, lessors, federal, state or local governments, or creditors in connection with your business; (ii) amounts related to all liens and encumbrances of every kind and character created or placed upon or against any of the property used in connection with the Aira Fitness Business or business; and (iii) all accounts and other indebtedness of every kind incurred by you in the conduct of the Aira Fitness Business or business. In the event you default in making any such payment, we are authorized, but not required, to pay the same on your behalf and you agree promptly to reimburse us on demand for any such payment.
- B. Insurance.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, several payment-related defaults, aside from rent, can trigger an Event of Default. These include failing to promptly pay obligations, assessments, and taxes due to Aira Fitness, its affiliates, suppliers, lessors, or governmental bodies. This also extends to amounts related to liens and encumbrances on property used in connection with the Aira Fitness business, and all other debts incurred in conducting the business.
Specifically, if a franchisee fails to make these payments when due, Aira Fitness is authorized (but not required) to make the payment on the franchisee's behalf. In such cases, the franchisee must promptly reimburse Aira Fitness upon demand. This clause ensures that Aira Fitness can step in to protect its brand and the franchisee's business operations from potential disruptions caused by unpaid debts.
Additionally, intentionally underreporting membership sales or gross sales, falsifying financial data, or committing any act of fraud related to the franchise agreement also constitutes an immediate default with no opportunity to cure. This includes any understatement or 2% variance on a subsequent audit within a two-year period. These measures are in place to safeguard the integrity of the Aira Fitness system and ensure fair financial reporting across all franchise locations.