Who is responsible for the cost of curing a Default under the Franchise Agreement for Aira Fitness?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to complete the required maintenance, we reserve the right (but no obligation) to do so on your behalf and you must reimburse us for our costs and expenses.
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You acknowledge and agree that our agent or other representative we designate may take over, control and operate the Business, that you shall pay us a fee for such management service, not to exceed fifteen percent (15%) of Gross Sales plus all travel expenses, room and board and other expenses actually incurred by such agent or representative so long as it shall be required to enforce compliance with this Agreement.
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You agree to indemnify, defend and hold us, our affiliates, and our and our affiliates' shareholders, directors, officers, employees, agents and transferees, harmless against and to reimburse us for: (1) all such obligations, damages, and taxes for which we are held liable and for all costs we reasonably incur in the defense of any such claim brought against us or in any such action in which we are named as a party; (2) any liability, cost or expense we suffer, sustain or incur arising out of or relating to your development and/or operation of your Aira Fitness Business or any of your Owners', managers', employees', or other agents' acts or failure to act in connection therewith; and (3) all cost, expense or loss we incur in enforcing the provisions of this Agreement, in defending our actions taken relating to this Agreement, or resulting from
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, a franchisee is generally responsible for curing defaults under the Franchise Agreement. Specifically, if a franchisee fails to complete required maintenance, Aira Fitness has the right, but not the obligation, to perform the maintenance on the franchisee's behalf, and the franchisee must then reimburse Aira Fitness for all costs and expenses incurred. This means the franchisee bears the financial burden of rectifying any failures to maintain the Aira Fitness business according to the franchisor's standards.
Additionally, if Aira Fitness chooses to operate the business temporarily due to a franchisee's uncured default, the franchisee must pay Aira Fitness a fee for the management service, not exceeding fifteen percent of Gross Sales, plus all travel expenses, room and board, and other expenses incurred by the agent or representative enforcing compliance. The franchisee also agrees to indemnify Aira Fitness and its representatives from any claims arising out of their operation of the business during the default period. This further emphasizes the franchisee's financial responsibility for costs associated with defaults.
Furthermore, the franchisee is obligated to indemnify Aira Fitness, its affiliates, and their representatives against various liabilities, costs, and expenses, including those incurred in enforcing the Franchise Agreement or defending actions related to it. This indemnification covers actual and consequential damages, legal fees, investigation costs, and other litigation expenses resulting from the franchisee's breach of the agreement. This obligation remains in effect even after the termination or expiration of the Franchise Agreement, ensuring the franchisee remains liable for any lingering financial repercussions of their defaults.
In the context of lease defaults, if a tenant (franchisee) defaults under the lease, Aira Fitness has the option, but not the obligation, to cure the default and assume the tenant's interest in the lease. However, the document does not explicitly state who bears the cost of curing a lease default if Aira Fitness chooses not to assume the lease. A prospective franchisee should seek clarification from Aira Fitness regarding financial responsibilities related to lease defaults and the circumstances under which Aira Fitness might cover such costs.