Under what condition can Aira Fitness defer payment of the initial franchise fee?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
SCLOSURE DOCUMENT FOR THE STATE OF ILLINOIS
Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.
Illinois law governs the Franchise Agreement and Multi-Unit Development Agreement. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void.
Source: Item 17 — **RENEWAL, TERMINATION,TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 48–54)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the payment of the initial franchise fee can be deferred under specific conditions, primarily related to the franchisor's obligations and the franchisee's commencement of business. In Illinois, the initial franchise fee/development fees will be deferred until Aira Fitness has met its initial obligations to the franchisee, and the franchisee has commenced business. This requirement was imposed by the Office of the Illinois Attorney General due to Aira Fitness's financial condition.
For franchisees in Virginia, the Virginia State Corporate Commission's Division of Securities and Retail Franchising requires Aira Fitness to defer payment of the initial franchise fee and other initial payments until Aira Fitness has completed its pre-opening obligations under the franchise agreement.
These deferral conditions provide a level of financial assurance to franchisees, ensuring that Aira Fitness fulfills its initial responsibilities before requiring payment of the franchise fee. This can be particularly beneficial for new franchisees as it reduces their upfront financial burden and aligns the franchisor's interests with the franchisee's success.