Can the Aira Fitness franchisee deduct damages from payments due to Aira Fitness's Affiliate under the UCC?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
522 of the UCC, including but not limited to Franchisee's rights to: (i) cancel this Lease; (ii) repudiate this Lease; (iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v) recover damages from Franchisor's Affiliate for any breaches of warranty or for any other reason; (vi) a security interest in the Equipment in Franchisee's possession or control for any reason; (vii) deduct all or any part of any claimed damages resulting from Franchisor's Affiliate's default, if any, under this Lease; (viii) accept partial delivery of the Equipment; (ix) "cover" by making any purchase, or lease of, or contract to purchase or lease Equipment in substitution for those due from Franchisor's Affiliate; (x) recover any general, special, incidental or consequential damages, for any reason whatsoever; and (xi) specific performance, replevin, detinue, sequestration, claim and delivery or the like for any Equipment identified to this Lease. To the extent permitted by applicable law, Franchisee also hereby waives any rights now or hereafter conferred by statute or otherwise, which may require Franchisor's Affiliate to sell, lease or otherwise use any Equipment in mitigation of Franchisor's Affiliate's damages as set forth in Section 12 or which may otherwise limit or modify any of Franchisor's Affiliate's rights or remedies under Section 12 Any claim or action for breach of warranty shall be commenced within one (1) year after any such cause of action accrues.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, a franchisee has specific rights under UCC Section 2A-522 regarding equipment leases with Aira Fitness's affiliates. These rights include the ability to cancel or repudiate the lease, reject or revoke acceptance of the equipment, and recover damages for breaches of warranty or other reasons. The franchisee may also have a security interest in the equipment and can pursue actions like specific performance or replevin.
Specifically, the Aira Fitness franchisee has the right to deduct damages resulting from the affiliate's default under the lease from payments. This means if the affiliate breaches the lease agreement, causing the franchisee financial harm, the franchisee can reduce their lease payments by the amount of those damages.
However, the franchisee must commence any claim or action for breach of warranty within one year after the cause of action accrues. Additionally, the franchisee waives any rights that may require Aira Fitness's affiliate to mitigate damages or limit their remedies under Section 12 of the agreement, to the extent permitted by applicable law.