What happens if proceedings for reorganization in bankruptcy are instituted against an Aira Fitness franchisee without their consent?
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 the 2025 Aira Fitness Franchise Disclosure Document, if a franchisee becomes insolvent or has a bankruptcy or insolvency petition filed either by or against them, the process for continuing the franchise agreement involves several steps. If the franchisee's legal representative, successor, receiver, or trustee wants to maintain the franchisee's interest in the agreement and business, they must first notify Aira Fitness.
Next, they must offer Aira Fitness the right of first refusal, as detailed in Section 12.E of the franchise agreement. If Aira Fitness declines to exercise this right, the representative must then apply for and secure Aira Fitness's consent to the transfer. This includes paying any applicable transfer fees as specified in Section 12.C and fulfilling all transfer conditions also outlined in Section 12.C.
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 ensures that Aira Fitness is financially protected from expenses arising from the franchisee's financial difficulties and that the transfer of the franchise is managed according to Aira Fitness's standards and requirements.