Can an arbitrator assess punitive damages against Aira Fitness?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Any unappealed decision of the arbitrator(s) will be final and binding on all parties to the dispute; however, the arbitrator(s) shall have no authority to: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; (iii) certify a class or consolidate an action, or (iv) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set. A judgment may be entered upon the arbitration award by any court of competent jurisdiction.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, an arbitrator does not have the authority to assess punitive or exemplary damages. The FDD specifies that any arbitrator's decision is final and binding, but their powers are limited.
Specifically, the arbitrator cannot stay the effectiveness of any pending termination of the agreement, assess punitive or exemplary damages, certify a class or consolidate an action, or make any award that extends, modifies, or suspends any lawful term of the agreement or any reasonable standard of business performance set by Aira Fitness. This limitation on the arbitrator's authority is a standard practice in franchising, designed to protect the franchisor from excessive or unpredictable damage awards.
This clause ensures that disputes are resolved through arbitration, which is generally faster and less expensive than litigation, but it also protects Aira Fitness from potentially large punitive damage awards. Franchisees should be aware of this limitation, as it affects the potential remedies available to them in case of a dispute with the franchisor.