For each Aira Fitness Franchise Agreement, can the franchisee be a separate entity owned by the developer's Owners?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
must be established and operated pursuant to a separate Franchise Agreement ("Franchise Agreement") to be entered into by you (or an entity owned by your Owners) and us. Each Franchise Agreement shall be in the form of Franchise Agreement being offered by us at the time you execute the Franchise Agreement, which may differ from the form of Franchise Agreement being offered by us on the date of execution of this Agreement, except that an addendum to the Franchise Agreement shall be entered into to incorporate terms of this Agreement relating to payments due under each Franchise Agreement. The terms and conditions of each such Franchise Agreement shall control the establishment and operation of such Aira Fitness Center.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, each Aira Fitness Center must be established and operated under a separate Franchise Agreement entered into by either the developer or an entity owned by the developer's Owners and Aira Fitness. This means a franchisee can operate their Aira Fitness franchise through a separate legal entity, such as a corporation or LLC, rather than as an individual. This entity must be owned by the franchisee's Owners.
This structure offers potential benefits such as limiting personal liability, as the business's debts and obligations would primarily be the responsibility of the entity, not the individual owners. It can also provide tax advantages and facilitate business management. However, the FDD also states that all Owners of the Developer must personally guarantee the agreement. This means that despite operating under a separate entity, the Owners are still personally liable for the obligations and performance of the franchise.
Prospective Aira Fitness franchisees should consult with legal and financial advisors to determine the most suitable business structure for their specific circumstances, considering both the benefits of liability protection and the implications of the personal guarantee. Understanding the interplay between the franchise agreement, the entity structure, and the personal guarantees is crucial for managing risk and ensuring compliance with Aira Fitness's requirements.