What happens if the Aira Fitness franchisee fails to furnish reports, financial statements, tax returns or schedules as required?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Further, if the audit is made necessary by your failure to furnish reports, financial statements, tax returns or schedules as herein required, or if an understatement of Gross Sales for any period is determined by any such inspection or audit to be greater than two percent (2%), you shall reimburse usfor the cost of such inspection or audit including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board, and compensation of our employees or agents, and we shall have the right to require you to furnish, at your sole cost and expense, financial statements prepared by an independent certified public accountant thereafter.
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 fails to furnish required reports, financial statements, tax returns, or schedules, Aira Fitness may conduct an inspection or audit. If the audit is necessitated by this failure, the franchisee will be responsible for reimbursing Aira Fitness for the costs associated with the inspection or audit. These costs may include charges from attorneys and independent accountants, as well as travel expenses, room and board, and compensation for Aira Fitness employees or agents.
Furthermore, Aira Fitness has the right to demand that the franchisee provide financial statements prepared by an independent certified public accountant at the franchisee's expense. This measure ensures that Aira Fitness receives accurate and reliable financial information, especially when the franchisee has previously failed to meet reporting obligations.
In addition to covering the costs of the inspection and audit, the franchisee will also be required to pay any outstanding royalties, national marketing fees, and other fees, along with applicable interest and late fees, on any understated gross sales identified during the audit. This provision ensures that Aira Fitness is compensated for any financial discrepancies resulting from the franchisee's failure to provide accurate and timely reports. Franchisees should maintain meticulous records and adhere to all reporting requirements to avoid these potential financial penalties and maintain a positive relationship with Aira Fitness.