What costs can Aira Fitness's Franchisor's Affiliate recover from the franchisee related to equipment repossession?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) Without notice to Franchisee, repossess the Equipment wherever found, with or without legal process, and for this purpose Franchisor's Affiliate and/or its agents may enter upon any premises of or under the control or jurisdiction of Franchisee or any agent of Franchisee, without liability for suit, action or other proceeding by Franchisee (any damages occasioned by such repossession being hereby expressly waived by Franchisee) and remove the Equipment therefrom; Franchisee further agrees on demand, to assemble the Equipment and make it available to Franchisor's Affiliate at a place to be designated by Franchisor's Affiliate which is reasonably convenient to Franchisor's Affiliate;
(f) In its sole discretion, re-lease or sell any or all of the Equipment at a public or private sale on such terms and notice as Franchisor's Affiliate shall deem reasonable (such sale may, at Franchisor's Affiliate's sole option, be conducted at Franchisee's premises), and recover from Franchisee damages, not as a penalty, but herein liquidated for all purposes and in an amount equal to the sum of (i) any accrued and all unpaid rent as of the later of (A) the date of default or (B) the date that Franchisor's Affiliate has obtained possession of the Equipment or such other date as Franchisee has made an effective tender of possession of the Equipment back to Franchisor's Affiliate ("Default Date"), plus interest at the rate of eighteen percent (18%) per annum; (ii) the present value of all future rentals reserved in the Lease and contracted to be paid over the unexpired term of the Lease discounted at a rate equal to the discount rate of the Federal Reserve Bank of Chicago as of the Default Date plus interest on said sum at the rate of eighteen percent (18%) per annum until paid; (iii) all commercially reasonable costs and expenses incurred by Franchisor's Affiliate in any repossession, recovery, storage, repair, sale,
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, if a franchisee defaults on their obligations, Franchisor's Affiliate has the right to repossess equipment and recover certain costs from the franchisee. These costs are not considered a penalty but are liquidated damages.
The recoverable damages include accrued and unpaid rent as of the later of the default date or the date Franchisor's Affiliate takes possession of the equipment, plus interest at 18% per annum. Additionally, the present value of all future rentals over the remaining lease term, discounted at the Federal Reserve Bank of Chicago's discount rate as of the default date, plus interest at 18% per annum until paid, can be recovered.
Furthermore, Aira Fitness can charge the franchisee for all commercially reasonable costs and expenses incurred during repossession, recovery, storage, repair, and sale of the equipment. The FDD states that the Franchisor's Affiliate can repossess the Equipment without notice and may enter the franchisee's premises without liability. The franchisee also waives any damages caused by the repossession.