Under the Aira Fitness Security Agreement, what is the Debtor's obligation that is secured?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Secured party, as franchisor, and Debtor, as franchisee, are parties to a Franchise Agreement of even date (the "Franchise Agreement") pursuant to which, among other things, Debtor is obligated to pay, from time to time, certain sums to Secured Party. In order to induce Secured Party to enter into the Franchise Agreement, Debtor, among other things, is entering into this Security Agreement pursuant to which Debtor's payment and performance of all obligations under the Franchise Agreement are secured on the terms and conditions hereinafter provided for. Capitalized terms defined in the Franchise Agreement shall have the same meaning herein as therein.
2. Security Interest.
To secure the payment and performance by Debtor of all obligations and liabilities under the Franchise Agreement (such payment and performance of such obligations and liabilities collectively, "Obligations"), Debtor shall and hereby does grant, convey, assign and transfer to Secured Party, a security interest in and to the Franchise Agreement and all signs and other personal property bearing any of the Marks used at, located on or affixed to the Aira Fitness Business operated by Debtor, and all fitness equipment, other equipment, fixtures, furniture, inventory and supplies located at Debtor Aira Fitness Business, whether now owned or hereafter acquired by Debtor (the "Collateral").
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the Security Agreement outlines the franchisee's (Debtor) obligations that are secured. The Debtor is obligated to pay certain sums to the Secured Party (Aira Fitness) under the Franchise Agreement. To induce Aira Fitness to enter into the Franchise Agreement, the Debtor's payment and performance of all obligations under the Franchise Agreement are secured by the Security Agreement. This means that the franchisee's responsibilities, including financial and operational duties, are guaranteed by granting Aira Fitness a security interest in specific assets.
Specifically, the security interest granted by the Debtor covers the Franchise Agreement itself, all signs and personal property bearing Aira Fitness marks used at the franchisee's business, and all fitness equipment, other equipment, fixtures, furniture, inventory, and supplies located at the Aira Fitness Business. This collateral, whether currently owned or acquired in the future, ensures that Aira Fitness has a claim on these assets if the franchisee fails to meet their obligations.
In practical terms, this means that if an Aira Fitness franchisee fails to make required payments or otherwise breaches the Franchise Agreement, Aira Fitness can take possession of the listed collateral to recover the losses. This is a common practice in franchising to protect the franchisor's investment and brand integrity. Prospective franchisees should carefully review the Security Agreement to fully understand the scope of the collateral and the conditions that could trigger a default.