Even if the Franchisor's Affiliate is aware of the likelihood of damages occurring, are they still excluded from liability for consequential damages under the Aira Fitness agreement?
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 Aira Fitness's 2025 Franchise Disclosure Document, the Franchisor's Affiliate is not liable for consequential damages, even if they are aware that such damages are likely to occur. The agreement specifies that the Franchisor's Affiliate will not be liable to the franchisee or any third party for consequential, incidental, special, or exemplary damages related to the transaction. This exclusion applies regardless of the legal theory the action is based on, including contract, tort (such as negligence or strict liability), or any other legal basis. The exclusion covers losses such as anticipated profits, benefits of use, or loss of business.
This exclusion of consequential damages is a significant point for prospective Aira Fitness franchisees. It means that if the franchisee experiences losses beyond direct damages, such as lost profits due to equipment malfunction, the Franchisor's Affiliate will not be held responsible. This limitation of liability is intended to be severable and an independent element of risk allocation between the parties. The agreement emphasizes that even if a remedy fails, the franchisee is not entitled to consequential damages.
The FDD underscores that this exclusion is an independent agreement, separate from any sole or exclusive remedy applicable to the equipment or Pod. This means that even if the franchisee has a specific remedy available for equipment issues, they still cannot claim consequential damages from the Franchisor's Affiliate. This clause is designed to limit the financial exposure of the Franchisor's Affiliate and allocate the risk of consequential losses to the franchisee.
Prospective franchisees should carefully consider this exclusion of consequential damages and understand its implications for their potential business operations. It is advisable to seek legal counsel to fully understand the risks and benefits associated with this provision in the Aira Fitness franchise agreement.