What costs will Aira Fitness charge the franchisee if the franchisee must reimburse Aira Fitness for the cost of an inspection or audit?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event any such inspection or audit shall disclose an understatement of the Gross Sales of the Aira Fitness Business for any period, you shall pay to us within ten (10) days after receipt of the inspection or the audit report, the Royalties, the National Marketing Fees, and other fees plus interest and late fees due on the amount of the understatement.
Further, if the audit is made necessary by your failure to furnish reports, financial statements, tax returns or schedules as herein required, or if an understatement of Gross Sales for any period is determined by any such inspection or audit to be greater than two percent (2%), you shall reimburse usfor the cost of such inspection or audit including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board, and compensation of our employees or agents, and we shall have the right to require you to furnish, at your sole cost and expense, financial statements prepared by an independent certified public accountant thereafter.
In addition, you shall pay for all costs, as specified above, of the inspection and audit if your books and records are not produced at the time of the inspection and audit, provided that we notified you at least five (5) days prior to the scheduled inspection and audit date.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, franchisees may have to reimburse Aira Fitness for the cost of inspections or audits under certain conditions. Specifically, if an audit reveals an understatement of Gross Sales greater than two percent (2%), Aira Fitness will require the franchisee to cover the expenses associated with the inspection or audit.
These reimbursable costs include charges from attorneys and independent accountants, as well as travel expenses, room and board, and compensation for Aira Fitness employees or agents involved in the inspection or audit. Additionally, if the franchisee fails to provide required reports, financial statements, tax returns, or schedules, leading to the necessity of the audit, they will also be responsible for covering these costs.
Furthermore, if a franchisee fails to produce their books and records at the time of a scheduled inspection or audit, provided they received at least five (5) days' notice, they will be required to pay all costs associated with the inspection and audit. This provision incentivizes franchisees to maintain organized and accessible records, ensuring compliance and transparency in their financial reporting to Aira Fitness.
These financial repercussions underscore the importance of accurate financial reporting and compliance with Aira Fitness's operational and reporting requirements. Franchisees should ensure they maintain meticulous records and promptly address any discrepancies to avoid incurring these potentially significant costs.