Can the Franchisor's Affiliate make determinations about equipment disposal for its own account after an Aira Fitness franchisee's default?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) If Franchisor's Affiliate decides, in its sole discretion, not to take possession of the Equipment, Franchisor's Affiliate continues to be the owner of the Equipment and may, but is not obligated to, dispose of the Equipment by sale or otherwise, all of which
- determinations may be made by Franchisor's Affiliate in its sole discretion and for its own account;
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 lease agreement, the Franchisor's Affiliate has the right to make certain determinations regarding the equipment. Specifically, if the Franchisor's Affiliate decides not to take possession of the equipment, it retains ownership and has the option, but not the obligation, to dispose of the equipment through sale or other means.
These determinations regarding the disposal of equipment can be made by the Franchisor's Affiliate at its sole discretion and for its own account. This means that Aira Fitness franchisees do not have control over how the equipment is disposed of or any proceeds gained from its disposal after a default if the affiliate chooses not to take possession.
This clause is important for prospective franchisees to understand, as it clarifies the rights of the Franchisor's Affiliate in the event of a default. It highlights that the affiliate has significant control over the equipment and its disposal, which could have financial implications for the franchisee depending on the circumstances of the default and the value of the equipment.