For Aira Fitness, is an option agreement for the business considered a transfer?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, an option agreement is considered a transfer of the franchise. This means that if a franchisee enters into an option agreement, they must comply with all transfer requirements outlined in Section 12 of the franchise agreement. These requirements include offering Aira Fitness the right of first refusal, obtaining the franchisor's prior written consent, paying a transfer fee (if applicable), and satisfying other transfer conditions.
This provision is significant for prospective Aira Fitness franchisees because it restricts their ability to exit the business or change its operational control without franchisor approval. The broad definition of 'transfer' ensures that Aira Fitness maintains control over who operates its branded locations and under what conditions. Franchisees should be aware that even arrangements that don't involve an outright sale, such as an option agreement, are subject to these transfer restrictions.
The transfer requirements also include the transferee meeting training requirements, providing financial reports, and potentially executing a new franchise agreement if the transfer results in a change of control. If the transferee is an existing Aira Fitness franchisee, the transfer fee is $5,000; otherwise, it is equal to the then-current initial franchise fee. These stipulations ensure that any new operator is adequately trained, financially sound, and committed to adhering to Aira Fitness's standards.
In summary, Aira Fitness franchisees need to understand that any agreement that allows another party to potentially take over the business, even temporarily, is treated as a transfer. This triggers a series of obligations and requirements that must be met to avoid violating the franchise agreement. Franchisees should carefully review Section 12 of the franchise agreement and consult with legal counsel before entering into any such arrangement.