What happens if an Aira Fitness franchisee applies for the appointment of a receiver, trustee, or liquidator?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 becomes insolvent or files any petition under bankruptcy or insolvency law, specific procedures must be followed for a successor to take over the franchisee's interest in the Franchise Agreement. The legal representative, successor, receiver, or trustee must first notify Aira Fitness and offer the company the right of first refusal to acquire the franchise.
If Aira Fitness declines to exercise its right of first refusal, the representative must then apply for and obtain Aira Fitness's consent to the transfer. They must also pay the applicable transfer fee and satisfy all other transfer conditions outlined in Section 12.C of the agreement. Furthermore, the franchisee or the transferee is responsible for covering all attorneys' fees and costs that Aira Fitness incurs during any bankruptcy or insolvency proceedings related to the franchisee.
This clause ensures that Aira Fitness maintains control over who operates a franchise location, even in situations of financial distress or legal proceedings. By requiring notification, right of first refusal, and adherence to transfer conditions, Aira Fitness can protect its brand and ensure that any new operator meets their standards. The responsibility for legal fees further protects Aira Fitness from financial burdens associated with a franchisee's insolvency.