Why is the payment of Initial Franchise/Development Fees deferred for an Aira Fitness franchise?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
ANCHISE AGREEMENT FOR THE STATE OF ILLINOIS
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- Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.
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- Illinois law governs the Franchise Agreement and Multi-Unit Development Agreement. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
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- Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
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- In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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Source: Item 17 — **RENEWAL, TERMINATION,TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 48–54)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the payment of Initial Franchise/Development Fees is deferred in certain instances due to specific requirements imposed by regulatory bodies and the franchisor's financial condition.
For franchisees in Illinois, the Office of the Illinois Attorney General mandates that Aira Fitness defer all initial franchise fees until Aira Fitness has fulfilled all its initial obligations to the franchisee under the Franchise Agreement, and the franchisee has commenced business operations. This requirement is based on Aira Fitness's financial condition. This means that an Aira Fitness franchisee in Illinois will not be required to pay the initial franchise fee until the franchisor has met its pre-opening obligations, such as providing training and site selection assistance, and the franchisee has opened their Aira Fitness location for business.
Similarly, for franchisees in Virginia, the Virginia State Corporate Commission's Division of Securities and Retail Franchising requires Aira Fitness to defer payment of the initial franchise fee and other initial payments until Aira Fitness has completed its pre-opening obligations under the franchise agreement. This ensures that franchisees in Virginia are not required to pay the initial franchise fee until Aira Fitness has fulfilled its pre-opening obligations.
For Multi-Unit Development Agreements, payment of the development fee is deferred until Aira Fitness has fulfilled its pre-opening obligations to the franchisee and the franchisee is open for business. This deferral is also reflected in addenda to the franchise agreement for other states, ensuring that franchisees are not burdened with upfront fees before the franchisor has provided the necessary support and the business is operational.