What damages can the Franchisor's Affiliate recover from an Aira Fitness franchisee upon default?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Exclusion of Consequential Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, FRANCHISOR'S AFFILIATE SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO FRANCHISEE OR ANY THIRD PARTY, FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTION CONTEMPLATED HEREUNDER, WHETHER IN AN ACTION BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY OTHER LEGAL THEORY, INCLUDING, BUT NOT LIMITED TO, LOSS OF ANTICIPATED PROFITS, OR BENEFITS OF USE OR LOSS OF BUSINESS, REGARDLESS OF WHETHER SUCH LOSSES ARE CONSTRUED TO BE CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES, AND EVEN IF FRANCHISOR'S AFFILIATE IS APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES, IS INTENDED BY THE PARTIES TO BE SEVERABLE FROM ANY OTHER PROVISION AND IS A SEPARABLE AND INDEPENDENT ELEMENT OF RISK ALLOCATION AND IS INTENDED TO BE ENFORCED AS SUCH. THE PARTIES ALSO AGREE THAT, REGARDLESS OF THE FAILURE OF ANY SOLE OR EXCLUSIVE REMEDY APPLICABLE TO THE EQUIPMENT, FRANCHISEE WILL NOT BE ENTITLED TO ANY CONSEQUENTIAL DAMAGES OF WHATSOEVER KIND OR NATURE. THE PARTIES INTEND THE EXCLUSION OF CONSEQUENTIAL DAMAGES AS AN INDEPENDENT AGREEMENT APART FROM ANY SOLE AND EXCLUSIVE REMEDY APPLICABLE TO THE EQUIPMENT.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, the agreement outlines specific limitations regarding the liability of the Franchisor's Affiliate and the damages they can recover from a franchisee. Specifically, the document states that the Franchisor's Affiliate will not be liable for consequential, incidental, special, or exemplary damages under any circumstances. This includes potential losses such as anticipated profits, benefits of use, or loss of business, regardless of whether these losses are categorized as consequential, incidental, special, or exemplary damages. This limitation applies whether the action is based on contract, tort (including negligence or strict liability), or any other legal theory, and it holds true even if the Franchisor's Affiliate was aware of the possibility of such damages occurring.
This exclusion of certain types of damages represents a significant risk allocation between Aira Fitness and its franchisees. By agreeing to these terms, a franchisee waives the right to claim these types of damages from the Franchisor's Affiliate, which could substantially limit the franchisee's potential recovery in the event of a dispute or breach. The agreement emphasizes that each provision limiting liability, disclaiming warranties, or excluding damages is severable and independently enforceable, further reinforcing the intention to strictly enforce these limitations.
The document also clarifies that the exclusion of consequential damages is an independent agreement, separate from any sole or exclusive remedy applicable to the equipment. This means that even if a remedy related to the equipment fails, the franchisee is still not entitled to any consequential damages. This provision is designed to provide the Franchisor's Affiliate with a high degree of protection against potentially large and unpredictable damage claims.
Prospective Aira Fitness franchisees should carefully consider these limitations on liability and damages, as they can significantly impact their legal recourse in the event of a dispute with the Franchisor's Affiliate. It is advisable to seek legal counsel to fully understand the implications of these provisions and to assess the potential risks involved.