Does the Aira Fitness Guaranty allow the Franchisor to repeatedly otherwise change the time for payment under the Franchise Agreement without the Guarantor's consent?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
| 4. | Guarantor's Authorization to Franchisor. | | Guarantor(s) authorizes Franchisor, | without notice or demand and without lessening Guarantor's liability under this Guaranty, from time | to time: (a) to make or approve changes to the Franchise Agreement; (b) to repeatedly compromise, | renew, extend, accelerate, or otherwise change the time for payment or other terms of the Franchise | Agreement; (c) to take and hold security for the payment of amounts due under the Franchise | Agreement or this Guaranty, and exchange, enforce, waive, and release any such security, with or | without the substitution of new collateral; (d) to determine how, when, and what application of | payments and credits shall be made on amounts due under the Franchise Agreement; and (j) to assign | or transfer this Guaranty, in whole or in part.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, the Guaranty agreement does allow Aira Fitness to repeatedly change the time for payment under the Franchise Agreement without needing the Guarantor's consent. Specifically, the Guarantor authorizes Aira Fitness to make changes to the Franchise Agreement, including repeatedly compromising, renewing, extending, accelerating, or otherwise changing the time for payment or other terms of the Franchise Agreement, without notice or demand and without lessening the Guarantor's liability.
This clause in the Guaranty agreement has significant implications for anyone acting as a guarantor for an Aira Fitness franchise. It means that the guarantor's obligations can be altered by Aira Fitness without requiring further consent from the guarantor. For example, if the franchisee is struggling, Aira Fitness could extend the payment schedule, increasing the total interest paid over time, and the guarantor would remain liable under the altered terms.
This type of clause is not uncommon in franchise agreements, as it provides the franchisor with flexibility in managing the financial arrangements with franchisees. However, it places a considerable burden on the guarantor, who must be prepared to honor the obligations even if the terms of the agreement change. Prospective guarantors should carefully consider this aspect and fully understand the potential financial risks before signing the Guaranty.
It would be prudent for a potential guarantor to seek legal counsel to fully understand the scope of this authorization and to negotiate any possible limitations or protections before signing the guaranty. Understanding the extent of the financial commitment and the potential for changes in payment terms is crucial for making an informed decision.