Does releasing security for the Aira Fitness Franchisee's obligations affect the Guarantor's obligations?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
| 4. | Guarantor's Authorization to Franchisor. | | Guarantor(s) authorizes Franchisor, | | without notice or demand and without lessening Guarantor's liability under this Guaranty, from time | | to time: (a) to make or approve changes to the Franchise Agreement; (b) to repeatedly compromise, | | renew, extend, accelerate, or otherwise change the time for payment or other terms of the Franchise | | Agreement; (c) to take and hold security for the payment of amounts due under the Franchise | | Agreement or this Guaranty, and exchange, enforce, waive, and release any such security, with or | | without the substitution of new collateral; (d) to determine how, when, and what application of | | payments and credits shall be made on amounts due under the Franchise Agreement; and (j) to assign | | or transfer this Guaranty, in whole or in part.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the guarantor's obligations are not lessened if Aira Fitness chooses to release security for the franchisee's obligations. Specifically, Aira Fitness has the authority, without notifying the guarantor or impacting the guarantor's liability, to take and hold security for amounts owed under the Franchise Agreement or the Guaranty. They can also exchange, enforce, waive, and release any such security, with or without substituting new collateral.
This means that even if Aira Fitness releases a security interest it holds on the franchisee's assets, the guarantor remains fully liable for the franchisee's obligations. The guarantor cannot claim that their obligations are reduced or eliminated because Aira Fitness released some or all of the collateral securing the franchisee's debt. This clause protects Aira Fitness by ensuring the guarantor remains responsible regardless of any changes to the security arrangement between Aira Fitness and the franchisee.
For a prospective Aira Fitness franchisee, this highlights the importance of understanding the full scope of the personal guarantee. The guarantor's liability is broad and not contingent on the specific assets securing the franchise's debt. Therefore, potential guarantors should carefully assess the franchisee's financial stability and the risks associated with the Aira Fitness franchise before signing the guarantee, as their personal assets are at stake regardless of any security releases.