What is the scope of the Guarantor's authorization to Aira Fitness under the Guaranty?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
be paid in full.
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- Reports. You must have provided all required reports to us in accordance with Section 10.
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- Modernization. You must have complied with the provisions of Section 5.F.
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- Guarantee. In the case of an installment sale for which we have consented to you or any Owner retaining a security interest or other financial interest in this Agreement or the business operated hereunder, you or such Owner, and the guarantors, are obligated to guarantee the performance under this Agreement until the final close of the installment sale or the termination of such interest, as the case may be.
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Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, the guarantor's authorization relates to the transfer of the franchise. Specifically, in the case of an installment sale where the franchisee or an owner retains a security interest or other financial interest, the guarantors are obligated to guarantee performance under the Franchise Agreement. This obligation lasts until the final close of the installment sale or the termination of such interest.
Additionally, in the event of a transfer of the franchise, Aira Fitness requires that each guarantor execute all transfer documents in the form designated by the franchisor. These documents will include a general release of all claims arising out of or relating to the Franchise Agreement, the Aira Fitness Business, or the business relationship between the parties. However, this release will not be inconsistent with any state law regulating franchising.
In practical terms, this means that if a franchisee sells their Aira Fitness franchise and finances the sale, the guarantor remains responsible for the franchisee's obligations until the sale is fully completed. Furthermore, when any transfer occurs, the guarantor must sign documents releasing Aira Fitness from any potential claims, ensuring a clean break and protecting the franchisor from future liabilities related to the previous franchisee's operation. Prospective franchisees should carefully review the specific terms of the guaranty and transfer documents with legal counsel to fully understand the scope of these obligations.