What is Aira Fitness's primary performance obligation under the franchise agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Secured party, as franchisor, and Debtor, as franchisee, are parties to a Franchise Agreement of even date (the "Franchise Agreement") pursuant to which, among other things, Debtor is obligated to pay, from time to time, certain sums to Secured Party. In order to induce Secured Party to enter into the Franchise Agreement, Debtor, among other things, is entering into this Security Agreement pursuant to which Debtor's payment and performance of all obligations under the Franchise Agreement are secured on the terms and conditions hereinafter provided for. Capitalized terms defined in the Franchise Agreement shall have the same meaning herein as therein.
2. Security Interest.
To secure the payment and performance by Debtor of all obligations and liabilities under the Franchise Agreement (such payment and performance of such obligations and liabilities collectively, "Obligations"), Debtor shall and hereby does grant, convey, assign and transfer to Secured Party, a security interest in and to the Franchise Agreement and all signs and other personal property bearing any of the Marks used at, located on or affixed to the Aira Fitness Business operated by Debtor, and all fitness equipment, other equipment, fixtures, furniture, inventory and supplies located at Debtor Aira Fitness Business, whether now owned or hereafter acquired by Debtor (the "Collateral").
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, the franchisee's primary performance obligation involves paying certain sums to Aira Fitness, as outlined in the franchise agreement. To ensure the franchisor enters into the Franchise Agreement, the franchisee must also enter into a Security Agreement. This agreement ensures that the franchisee's payment and performance of all obligations under the Franchise Agreement are secured according to the terms and conditions provided.
To secure these obligations, the franchisee grants Aira Fitness a security interest in the Franchise Agreement itself, along with all signs and personal property displaying Aira Fitness's trademarks. This extends to fitness equipment, other equipment, fixtures, furniture, inventory, and supplies located at the franchisee's Aira Fitness Business, regardless of when these assets were acquired.
This arrangement protects Aira Fitness by allowing them to claim these assets if the franchisee fails to meet their financial or performance obligations. For a prospective franchisee, this means understanding that their business assets are pledged as collateral, which could be seized if they default on the franchise agreement. It is important for potential franchisees to fully understand the financial obligations and performance standards required by the franchise agreement to avoid potential default and loss of assets.