What is the condition regarding the Franchisor's obligation to mediate claims related to the Aira Fitness franchise?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, any dispute between the franchisee and Aira Fitness must be submitted to binding arbitration under the Federal Arbitration Act. This includes disputes involving Aira Fitness's affiliates, officers, directors, shareholders, members, guarantors, employees, or owners. The arbitration will be managed according to the rules and procedures of the American Arbitration Association (AAA).
Arbitration must be conducted on an individual basis, meaning franchisees waive their rights to participate in consolidated, common, or class action lawsuits. Multiparty arbitration is specifically excluded. The arbitration will take place in the Chicago, Illinois metropolitan area, and the arbitrator must have at least five years of experience in franchising or franchise law. The arbitrator is required to follow the law and cannot disregard the terms of the Franchise Agreement.
However, the arbitrator does not have the authority to stay the termination of the Franchise Agreement, assess punitive damages, certify a class action, or modify any lawful term of the agreement or any reasonable standard of business performance set by Aira Fitness. The decision of the arbitrator is final and binding. A court of competent jurisdiction can enter a judgment based on the arbitration award. This means that franchisees are giving up their right to sue Aira Fitness in court and instead must resolve disputes through arbitration, which has specific limitations on the remedies available.