Does the Aira Fitness franchise agreement allow for multiparty arbitration?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, the franchise agreement specifically excludes multiparty arbitration. Any arbitration between the franchisee and Aira Fitness must be conducted on an individual basis, explicitly prohibiting consolidated, common, or class action lawsuits.
This means that an Aira Fitness franchisee cannot join with other franchisees to bring a single arbitration case against the franchisor. Each franchisee must pursue their claims independently. This can be a disadvantage for franchisees, as it may be more expensive and time-consuming to pursue individual arbitration compared to a joint action. Additionally, the exclusion of multiparty arbitration may limit a franchisee's ability to address systemic issues affecting multiple franchisees.
The FDD states that if a court or arbitrator deems the exclusion of multiparty arbitration unenforceable, the entire arbitration agreement becomes null and void. In such a case, all claims would be submitted to the jurisdiction of the courts. This clause ensures that Aira Fitness does not lose its right to resolve disputes through the court system if the arbitration clause is deemed invalid.
This provision is relatively common in franchise agreements, as franchisors often prefer to handle disputes on an individual basis. Prospective Aira Fitness franchisees should carefully consider the implications of this clause and consult with an attorney to understand their rights and options in case of a dispute with the franchisor.