Is the Aira Fitness Franchise Agreement itself considered a Security Agreement under the Uniform Commercial Code?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
NT**
| Aira Fitness Franchising LLC, an Illinois limited | liability company ("Secured Party"), and |
|---|---|
| , a(n) | ("Debtor"), agree as |
| follows: |
1. Background.
Secured party, as franchisor, and Debtor, as franchisee, are parties to a Franchise Agreement of even date (the "Franchise Agreement") pursuant to which, among other things, Debtor is obligated to pay, from time to time, certain sums to Secured Party. In order to induce Secured Party to enter into the Franchise Agreement, Debtor, among other things, is entering into this Security Agreement pursuant to which Debtor's payment and performance of all obligations under the Franchise Agreement are secured on the terms and conditions hereinafter provided for. Capitalized terms defined in the Franchise Agreement shall have the same meaning herein as therein.
2. Security Interest.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the Franchise Agreement itself is not the security agreement. Instead, to induce Aira Fitness to enter into the Franchise Agreement, the franchisee (Debtor) enters into a separate Security Agreement. This Security Agreement ensures the franchisee's payment and performance of all obligations under the Franchise Agreement.
Under this Security Agreement, the franchisee grants Aira Fitness a security interest in the Franchise Agreement itself, along with all signs and personal property bearing Aira Fitness's marks, fitness equipment, other equipment, fixtures, furniture, inventory, and supplies located at the franchisee's Aira Fitness Business. This collateral secures the franchisee's obligations to Aira Fitness.
In practical terms, this means that if a franchisee fails to meet their financial or performance obligations under the Franchise Agreement, Aira Fitness has the right to claim the assets listed as collateral in the Security Agreement. This is a common practice in franchising to protect the franchisor's investment and ensure compliance with the terms of the agreement.