What happens if Aira Fitness does not exercise its right of first refusal when a franchisee wants to transfer their Aira Fitness business?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
n. We have the right to control any litigation related to our copyrights or the Work. You agree to assist us, as directed by us, in any claim or action against the infringer.
12. TRANSFER OF FRANCHISE
- 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.
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 wishes to transfer their Aira Fitness business to a third party, they must first offer Aira Fitness the right of first refusal to acquire the franchise agreement. If Aira Fitness chooses not to exercise this right, the franchisee can proceed with the transfer to the third party, provided they meet certain conditions. These conditions include obtaining Aira Fitness's prior written consent, paying a transfer fee (if applicable), and satisfying other transfer conditions outlined in Section 12.C of the agreement.
The transfer is contingent on Aira Fitness not unreasonably withholding consent, assuming all specified conditions are met. The franchisee must submit an application for consent to transfer, including the proposed purchase agreement and any other required information. Aira Fitness retains the right to ensure that the financial terms of the transfer will not negatively impact the business's ability to operate and meet its financial obligations post-transfer.
Additionally, the transferee must comply with training requirements and may be required to execute Aira Fitness's current form of franchise agreement and personal guaranty, especially if the transfer results in a change of control. The franchisee, owners, and guarantors must also execute a general release of claims related to the franchise agreement and business relationship. If the transferee is not an existing Aira Fitness franchisee, the transfer fee is equal to the then-current initial franchise fee. If the transferee is an existing franchisee, the transfer fee is $5,000.
Overall, while Aira Fitness has the first option to buy back the franchise, their decision not to exercise this right does not automatically clear the way for the franchisee to transfer to just anyone. Aira Fitness maintains control over who joins their system and under what terms, ensuring brand consistency and financial stability among its franchisees.