If Aira Fitness accepts the assignment of Membership Contracts, does Aira Fitness assume liability for monies owed or other liabilities relating to the Membership Contracts that accrued prior to the assignment's effective date?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of expiration or termination of the Franchise Agreement, and in order to secure continuity and stability of the operation of the Aira Fitness Business, Franchisee hereby sells, assigns, transfers and conveys to the Aira Fitness all of its rights, title and interest in and to all Membership Contracts; provided, however, such Assignment will not be effective unless and until the Franchise Agreement has expired or is terminated in accordance with the provisions thereof and Aira Fitness has delivered to Franchisee written notice of its acceptance of the assignment. In the event of such assignment, AIRA Fitness will assume no liability for monies owed or other liabilities relating to the Membership Contracts that have accrued prior to the effective date of the assignment.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, if the Franchise Agreement expires or is terminated and Aira Fitness provides written notice of its acceptance of the assignment of Membership Contracts, Aira Fitness assumes no liability for monies owed or other liabilities relating to the Membership Contracts that accrued prior to the effective date of the assignment. This means that the franchisee remains responsible for any outstanding financial obligations or liabilities associated with the membership contracts up to the point when Aira Fitness takes over the contracts.
This provision protects Aira Fitness from inheriting financial burdens created by the franchisee before the assignment. It also makes it crucial for prospective franchisees to maintain accurate financial records and fulfill all obligations to members before the potential expiration or termination of their franchise agreement.
For a prospective Aira Fitness franchisee, this highlights the importance of diligent financial management and customer service. Failure to meet obligations to members could lead to financial repercussions even after the franchise agreement ends and the membership contracts are assigned to Aira Fitness. Franchisees should seek legal counsel to fully understand their responsibilities and potential liabilities in the event of assignment.