Does the Aira Fitness Guaranty require the Guarantor to pay for the cure of a Default?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
In the case of an installment sale for which we have consented to you or any Owner retaining a security interest or other financial interest in this Agreement or the business operated hereunder, you or such Owner, and the guarantors, are obligated to guarantee the performance under this Agreement until the final close of the installment sale or the termination of such interest, as the case may be.
Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void and will provide us with the right to elect either to default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfer fee provided for in Section 12.C.
You agree to pay promptly when due: (i) all payments, obligations, assessments and taxes due and payable to us and our affiliates, suppliers, lessors, federal, state or local governments, or creditors in connection with your business; (ii) amounts related to all liens and encumbrances of every kind and character created or placed upon or against any of the property used in connection with the Aira Fitness Business or business; and (iii) all accounts and other indebtedness of every kind incurred by you in the conduct of the Aira Fitness Business or business.
In the event you default in making any such payment, we are authorized, but not required, to pay the same on your behalf and you agree promptly to reimburse us on demand for any such payment.
You must maintain in full force and effect throughout the term of this Agreement that insurance which you determine is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of the Aira Fitness Business.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, the guarantor may be obligated to guarantee performance under the Franchise Agreement until the final close of an installment sale or the termination of such interest, in cases where Aira Fitness has consented to the franchisee or any owner retaining a security interest or other financial interest in the agreement or the business.
Additionally, if a franchisee attempts to transfer the franchise without Aira Fitness's prior written consent or not in compliance with the terms of the agreement, Aira Fitness has the right to either terminate the agreement or collect from the franchisee and the guarantors a transfer fee equal to two times the standard transfer fee.
Furthermore, in the event of specific defaults, such as failure to pay debts or maintain insurance, Aira Fitness is authorized, but not required, to make those payments on the franchisee's behalf, with the franchisee agreeing to promptly reimburse Aira Fitness on demand for any such payment. This suggests that while the guarantor's obligations are tied to specific events and transfers, the franchisee remains primarily responsible for curing defaults, although Aira Fitness can step in and expect reimbursement.