What constitutes a transfer of the Aira Fitness franchise according to the agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Transfers. We have entered into this Agreement with specific reliance upon your financial qualifications, experience, skills and managerial qualifications as being essential to the satisfactory operation of the Aira Fitness Business. Consequently, your interest in this Agreement or in the Aira Fitness Business, or all or substantially all of the assets of the Aira Fitness Business, or any Owner's interest in a franchisee that is a partnership or entity may be transferred or assigned to or assumed by any other person or entity (the "transferee"), in whole or in part, unless you have first tendered to us the right of first refusal to acquire this Agreement in accordance with Section 12.E , and if we do not exercise such right, unless our prior written consent is obtained, the transfer fee provided for in Section 12.C is paid, if applicable, and the transfer conditions described in Section 12.C are satisfied. Any sale (including installment sale), lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift or otherwise, or any arrangement pursuant to which you turn over all or part of the daily operation of the business to a person or entity who shares in the losses or profits of the business in a manner other than as an employee will be considered a transfer for purposes of this Agreement. Specifically, but without limiting the generality of the foregoing, the following events constitute a transfer and you must comply with the right of first refusal, consent, transfer fee, and other transfer conditions in this Section 12:
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- Any change or series of changes in the percentage of the franchisee entity owned, directly or indirectly, by the Owner (including any addition or deletion of any person or entity who qualifies as an Owner);
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- Any change in the general partner of a franchisee that is a general, limited or other partnership
entity; or
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, a transfer encompasses a broad range of scenarios where the franchisee's interest in the business changes hands or operational control is shifted. The agreement emphasizes that Aira Fitness has specifically relied on the franchisee's qualifications when granting the franchise, so any significant change requires their approval. This is a common practice in franchising, as franchisors want to ensure that new operators meet their standards.
The agreement defines a transfer as any sale, lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift, or any arrangement where the franchisee turns over all or part of the daily operation to someone who shares in the business's losses or profits (other than as an employee). This broad definition aims to capture any situation where the franchisee relinquishes control or ownership. Specifically, any change in the ownership percentage of the franchisee entity, or any change in the general partner of a franchisee that is a partnership, also constitutes a transfer.
For a prospective Aira Fitness franchisee, this means that even seemingly minor changes in ownership or operational control could trigger the transfer provisions of the franchise agreement. These provisions typically involve Aira Fitness having the right of first refusal to acquire the franchise, the payment of a transfer fee, and the satisfaction of certain transfer conditions. Failing to comply with these requirements could result in the attempted transfer being deemed void and potentially lead to termination of the franchise agreement or the imposition of a penalty fee. Therefore, it is crucial for franchisees to seek approval from Aira Fitness before making any changes to the ownership or operational structure of their business.