Who benefits from the dispute resolution provisions in the Aira Fitness franchise agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
ou must give us written notice at least thirty (30) days prior to the date of commencement of any offering or other transaction covered by this Section.
13. DISPUTE RESOLUTION
A. Arbitration; Mediation. Except as qualified below, any dispute between you and us and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease for the Aira Fitness Business or Authorized Location, the parties' relationship, the Aira Fitness Business, our Standards, or the scope or validity of the arbitration obligations under this Section must be submitted to binding arbitration under the authority of the Federal Arbitration Act and must be arbitrated in accordance with the then-current rules and procedures and under the auspices of the American Arbitration Association ("AAA"). Any arbitration must be on an individual basis, and not as part of a consolidated, common, or class action, and you and/or your Owners waive any right to proceed on a consolidated, common, or class basis. Multiparty arbitration is specifically excluded, and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action or otherwise to join or consolidate any claim with any claim or other proceeding involving third parties. In the event a court or arbitrator determines that this exclusion of multiparty arbitration (including class arbitration) is unenforceable, then this entire commitment to arbitrate will be null and void and the parties must submit all claims to the jurisdiction of the courts. Arbitration shall take place in the Chicago, Illinois metropolitan area. The arbitrators must follow the law and not disregard the terms of this Agreement. Any arbitrator must have at least five years' experience in franchising or in franchise law.
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.
We and you agree to be bound by the provisions of any limitation on the period of time by which claims must be brought under this Agreement or applicable law, whichever expires first. We and you further agree that, in connection with any arbitration proceeding, each party must submit or file any claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding will be barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, the dispute resolution provisions, specifically the arbitration clause, apply to disputes between the franchisee and Aira Fitness, including their respective affiliates, officers, directors, shareholders, members, guarantors, employees, or owners. This means that both Aira Fitness and the franchisee are bound to resolve disputes through arbitration rather than traditional litigation in many cases. The personal guarantee also binds the guarantor to the arbitration and other dispute resolution provisions.
The arbitration process mandates that it be conducted on an individual basis, explicitly prohibiting consolidated, common, or class actions. This waiver of class action rights can be a significant point for franchisees, as it prevents them from joining forces with other franchisees to pursue claims collectively. The arbitration must occur in the Chicago, Illinois metropolitan area, which may present a logistical and financial burden for franchisees located elsewhere. The arbitrator is required to have at least five years of experience in franchising or franchise law, ensuring some level of expertise in the field.
The arbitrator's authority is limited, as they cannot stay the termination of the franchise agreement, assess punitive damages, certify a class action, or modify any lawful term of the agreement or reasonable business performance standards set by Aira Fitness. The prevailing party in any action or proceeding related to the franchise agreement is entitled to recover reasonable attorneys' fees and costs. Furthermore, all parties waive their rights to a jury trial in connection with the enforcement or interpretation of any provision of the agreement.