Under what condition is an attachment or lien on the Aira Fitness Business NOT considered an Event of Default?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) if Debtor becomes insolvent, commits an act of bankruptcy, files a voluntary petition in bankruptcy, or an involuntary petition in bankruptcy is filed, or a permanent or temporary receiver or trustee for the Aira Fitness Business, or all or substantially all of the Debtor's property, is appointed by any court and such appointment is not actively opposed through legal action, or Debtor makes an assignment or arrangement for the benefit of creditors, or calls a meeting of creditors, or Debtor makes a written statement to the effect that he or it is unable to pay his or its debts as they become due, or a levy of execution is made upon Debtor, or an attachment or lien outstanding with respect to the Aira Fitness Business for thirty (30) days, unless the attachment or lien is being duly contested in good faith by Debtor and Secured Party is advised in writing
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, an attachment or lien outstanding with respect to the Aira Fitness Business for thirty (30) days is generally considered an Event of Default. However, this is not the case if the attachment or lien is being duly contested in good faith by the franchisee (Debtor) and Aira Fitness (Secured Party) is advised in writing.
This means that if a franchisee faces a legal claim resulting in an attachment or lien on their Aira Fitness business, they must actively challenge the claim through appropriate legal channels. Furthermore, they must inform Aira Fitness in writing about the situation and their efforts to contest it. Failing to do so within 30 days would constitute an Event of Default, potentially leading to consequences such as termination of the franchise agreement.
This provision protects the Aira Fitness franchisor by ensuring that franchisees address legal and financial challenges promptly and transparently. For a prospective franchisee, it highlights the importance of maintaining open communication with Aira Fitness and seeking legal counsel when facing such issues. It also underscores the need to diligently defend against claims that could jeopardize the business's assets or financial stability.