When signing the Franchise Agreement for additional Aira Fitness franchises under a Multi-Unit Development Agreement, how is the Development Fee applied?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
velopment
If you are a Developer, you mustsign the Franchise Agreement for your first Aira Fitness franchise and pay the initial franchise fee for the first franchise to be developed at the same time as you sign the Multi-Unit Development Agreement. In addition, you must pay a non-refundable Development Fee when you sign the Multi-Unit Development Agreement. The Development Fee is $6,000 times the number of additional Aira Fitness Businesses to be developed. The franchise fee for the second franchise will be $10,000. The franchise fee for the additional franchises after the second franchise will be $8,000.
When you sign the Franchise Agreement for the additional franchises, $6,000 of the Development Fee paid will be applied againstthe initial franchise fee for the franchise, and you will pay the balance due of $4,000 forthe second franchise and $2,000 for the additional franchises after the second franchise. For each franchise to be developed under the Multi-Unit Development Agreement, you will pay the initial franchise feesin the amount described in this Item 5 unless you fail to meet the Development Schedule in the Multi-Unit Development Agreement. If you failto meettheDevelopmentScheduleandthe then-currentinitialfranchisefeesforfranchises are higher than those described in this Franchise Disclosure Document, you must pay the then-current initial franchise fee.
The Development Fee is uniform for all Developers. The Development Fee is not refundable under any circumstances, but it is credited against additional franchise fees as descri
Source: Item 5 — INITIAL FEES (FDD pages 15–18)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, if you enter into a Multi-Unit Development Agreement, you must pay a Development Fee upon signing the agreement. This fee is calculated as $6,000 multiplied by the number of additional Aira Fitness businesses you plan to develop. While the Development Fee is non-refundable, a portion of it is applied towards the initial franchise fee when you sign the Franchise Agreements for the additional locations.
Specifically, $6,000 of the Development Fee will be credited against the initial franchise fee for each additional franchise. The initial franchise fee for the second franchise is $10,000, meaning you will need to pay a balance of $4,000 when signing the Franchise Agreement for the second location. For each additional franchise after the second, the initial franchise fee is $8,000, so you will pay a balance of $2,000 when signing the Franchise Agreement for those locations.
It's important to note that these initial franchise fees are applicable as long as you meet the Development Schedule outlined in the Multi-Unit Development Agreement. If you fail to adhere to the schedule and the then-current initial franchise fees are higher than those specified in the Franchise Disclosure Document, you will be required to pay the higher, then-current initial franchise fee for each location. This condition underscores the importance of meeting the agreed-upon development timeline to take advantage of the credit from the Development Fee and the initial franchise fees outlined in the FDD.