In the Aira Fitness Guaranty, what percentage ownership in the Developer must the Guarantor's percentage ownership equal?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement must be personally guaranteed and the obligations hereunder assumed by all of the Owners of the Developer, and all such Owners must execute the Guaranty and Assumption of Obligations which is attached hereto as Exhibit C concurrently with the execution of this Agreement by Developer.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 FDD, the Aira Fitness franchise agreement necessitates a personal guarantee from all owners of the Developer entity. This requirement ensures that each owner is individually responsible for the Developer's obligations under the agreement. All owners must sign the Guaranty and Assumption of Obligations, which is included as an exhibit to the Multi-Unit Development Agreement.
This condition means that anyone holding an ownership stake in the entity that is the Aira Fitness franchisee must personally guarantee the franchise's performance. This is a common practice in franchising, designed to ensure that those who benefit from the franchise's operations are also accountable for its success and adherence to the franchise agreement.
However, the excerpt from the Aira Fitness FDD does not specify a required percentage of ownership that the guarantor must hold. It only states that all owners of the Developer must execute the guaranty. A prospective franchisee should clarify with Aira Fitness Franchising, LLC what minimum ownership percentage, if any, triggers the personal guarantee requirement to fully understand the scope of this obligation.