Under what conditions related to insolvency or bankruptcy would an Aira Fitness franchisee be considered in default of the lease agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1. Definitions. The term "Event of Default" means the occurrence and continuation of any one (1) or more of the following events:
- (a) any failure of Debtor promptly and faithfully to pay, observe and perform, when due, any of the Obligations;
- (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 Aira Fitness franchisee can be considered in default of their franchise agreement under certain insolvency or bankruptcy conditions. Specifically, if the franchisee becomes insolvent, commits an act of bankruptcy, files a voluntary petition in bankruptcy, or faces an involuntary bankruptcy petition, it can trigger a default.
Additionally, the appointment of a permanent or temporary receiver or trustee for the Aira Fitness business or its assets by any court, if not actively opposed through legal action, can also constitute an event of default. Furthermore, if the franchisee makes an assignment or arrangement for the benefit of creditors, calls a meeting of creditors, or makes a written statement indicating an inability to pay debts as they become due, it can lead to a default. The occurrence of a levy of execution upon the franchisee or an attachment or lien outstanding with respect to the Aira Fitness business for thirty days, unless duly contested in good faith, also falls under the conditions that may trigger a default.
These conditions are fairly standard in franchise agreements, as franchisors need to protect their brand and system from the potential damage caused by a franchisee's financial instability. It is important for a prospective Aira Fitness franchisee to understand these default triggers and to maintain a solid financial footing to avoid such situations. Franchisees should consult with a legal and financial advisor to fully understand the implications of these clauses.