What happens if an assignment of rights under the Aira Fitness Development Agreement occurs without consent?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Transfers. We have entered into this Agreement with specific reliance upon your financial qualifications, experience, skills and managerial qualifications as being essential to the satisfactory operation of the Aira Fitness Business. Consequently, your interest in this Agreement or in the Aira Fitness Business, or all or substantially all of the assets of the Aira Fitness Business, or any Owner's interest in a franchisee that is a partnership or entity may be transferred or assigned to or assumed by any other person or entity (the "transferee"), in whole or in part, unless you have first tendered to us the right of first refusal to acquire this Agreement in accordance with Section 12.E , and if we do not exercise such right, unless our prior written consent is obtained, the transfer fee provided for in Section 12.C is paid, if applicable, and the transfer conditions described in Section 12.C are satisfied. Any sale (including installment sale), lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift or otherwise, or any arrangement pursuant to which you turn over all or part of the daily operation of the business to a person or entity who shares in the losses or profits of the business in a manner other than as an employee will be considered a transfer for purposes of this Agreement. Specifically, but without limiting the generality of the foregoing, the following events constitute a transfer and you must comply with the right of first refusal, consent, transfer fee, and other transfer conditions in this Section 12:
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- Any change or series of changes in the percentage of the franchisee entity owned, directly or indirectly, by the Owner (including any addition or deletion of any person or entity who qualifies as an Owner);
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- Any change in the general partner of a franchisee that is a general, limited or other partnership
entity; or
- For purposes of this Section 12.A, a pledge or seizure of any ownership interests in you or in any Owner that affects the ownership of 25% or more of you or Owner, which we have not approved in advance in writing.
In the event of your insolvency or the filing of any petition by or against you under any provisions of any bankruptcy or insolvency law, if your legal representative, successor, receiver or trustee desires to succeed to your interest in this Agreement or the business conducted hereunder, such person first must notify us, tender the right of first refusal provided for in Section 12.E, and if we do not exercise such right, must apply for and obtain our consent to the transfer, pay the transfer fee provided for in Section 12.C, if applicable, and satisfy the transfer conditions described in Section 12.C. In addition, you or the transferee must pay the attorneys' fees and costs that we incur in any bankruptcy or insolvency proceeding pertaining to you.
You may not place in, on or upon the location of the Aira Fitness Business, or in any communication media or any form of advertising, any information relating to the sale of the Aira Fitness Business or the rights under this Agreement, without our prior written consent.
- B.
Consent to Transfer.
We will not unreasonably withhold our consent to transfer, provided we determine that all of the conditions described in this Section 12 have been satisfied.
Application for our consent to a transfer and tender of the right of first refusal provided for in Section 12.E must be made by submission of our form of application for consent to transfer, which must be accompanied by the documents (including a copy of the proposed purchase or other transfer agreement) or other required information.
The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred.
No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us.
Any agreement used in connection with a transfer is subject to our prior written approval, which approval will not be withheld unreasonably.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the agreement is entered into with specific reliance on the franchisee's financial qualifications, experience, skills, and managerial qualifications. As such, the franchisee's interest in the agreement or the Aira Fitness business, or substantially all of the assets of the business, or any Owner's interest in a franchisee that is a partnership or entity may not be transferred or assigned to another person or entity unless Aira Fitness is first given the right of first refusal. If Aira Fitness does not exercise its right of first refusal, the franchisee must obtain Aira Fitness's prior written consent, pay the transfer fee, if applicable, and satisfy the transfer conditions.
Several events are specifically considered a transfer, requiring compliance with the right of first refusal, consent, transfer fee, and other transfer conditions. These events include any change or series of changes in the percentage of the franchisee entity owned, directly or indirectly, by the Owner, including any addition or deletion of any person or entity who qualifies as an Owner. Also, any change in the general partner of a franchisee that is a general, limited, or other partnership entity is considered a transfer. Additionally, a pledge or seizure of any ownership interests in the franchisee or in any Owner that affects the ownership of 25% or more of the franchisee or Owner, which Aira Fitness has not approved in advance in writing, is considered a transfer.
If the franchisee is insolvent or files for bankruptcy, and their legal representative, successor, receiver, or trustee desires to succeed to the franchisee's interest in the agreement or the business, they must first notify Aira Fitness, tender the right of first refusal, and if Aira Fitness does not exercise that right, apply for and obtain Aira Fitness's consent to the transfer. They must also pay the transfer fee, if applicable, and satisfy the transfer conditions. Furthermore, the franchisee or the transferee must pay the attorneys' fees and costs that Aira Fitness incurs in any bankruptcy or insolvency proceeding pertaining to the franchisee. The franchisee cannot place any information relating to the sale of the Aira Fitness business or the rights under the agreement at the location of the Aira Fitness business, or in any communication media or any form of advertising, without Aira Fitness's prior written consent.
Aira Fitness will not unreasonably withhold consent to a transfer, provided all conditions are met. An application for consent to transfer and tender of the right of first refusal must be made by submitting Aira Fitness's form of application for consent to transfer, accompanied by the necessary documents and information, including a copy of the proposed purchase or other transfer agreement. The application must indicate whether the franchisee or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created without Aira Fitness's prior written consent and except upon conditions acceptable to Aira Fitness. Any agreement used in connection with a transfer is subject to Aira Fitness's prior written approval, which will not be unreasonably withheld.