What are the primary sources of Aira Fitness' franchisee receivables?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's franchisee receivables primarily result from initial franchise fees, royalty fees, brand development contributions and training fees charged to franchisees. Timing of revenue recognition may be different from the timing of invoicing to customers. The Company records an accounts receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized after invoicing. The Company reports these receivables at net realizable value.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness' 2025 Franchise Disclosure Document, the company's franchisee receivables primarily come from several sources. These include initial franchise fees, which are the upfront payments franchisees make to obtain the rights to operate an Aira Fitness location. Additionally, royalty fees, which are ongoing payments typically calculated as a percentage of the franchisee's revenue, contribute to these receivables.
Brand development contributions, which franchisees may be required to pay for marketing and advertising efforts to promote the Aira Fitness brand, also factor into the receivables. Finally, training fees, which cover the costs associated with training franchisees and their staff to operate the business according to Aira Fitness' standards, are another source of these receivables.
It is important to note that the timing of revenue recognition for these fees may differ from when Aira Fitness invoices the franchisees. Aira Fitness records accounts receivable when revenue is recognized before invoicing and unearned revenue when revenue is recognized after invoicing. The company reports these receivables at net realizable value, which means the amount they expect to collect.