For Aira Fitness, is a pledge of the business considered a transfer?

According to the 2025 Aira Fitness Franchise Disclosure Document, a pledge of ownership interests can be considered a transfer. Specifically, any pledge or seizure of ownership interests in the franchisee or any owner that affects the ownership of 25% or more of the franchisee or owner, which Aira Fitness has not approved in advance in writing, is considered a transfer. This falls under Section 12.A of the FDD, which outlines various scenarios that constitute a transfer of the franchise.

This means that if a franchisee or owner pledges their ownership interest as collateral for a loan or other obligation, and that pledge affects 25% or more of the ownership, it is treated as a transfer requiring Aira Fitness's approval. This provision is in place to ensure that Aira Fitness maintains control over who owns and operates its franchises, and to protect the brand from being associated with individuals or entities that do not meet its standards.

For a prospective Aira Fitness franchisee, this means that they must obtain written approval from Aira Fitness before pledging any significant portion (25% or more) of their ownership interest in the franchise. Failure to do so could result in the pledge being considered an unapproved transfer, which could lead to penalties or even termination of the franchise agreement. This is a fairly standard clause in franchise agreements, as franchisors want to carefully control who their franchisees are.