Is Aira Fitness's Franchisor's Affiliate liable for consequential damages arising from the equipment lease transaction?
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, under certain conditions, is not liable for consequential damages related to the equipment lease transaction. Specifically, the lease agreement stipulates that the Franchisor's Affiliate will not be liable to the franchisee or any third party for consequential, incidental, special, or exemplary damages arising from the lease. This exclusion applies regardless of the legal theory under which a claim is made, including contract, tort (such as negligence or strict liability), or any other legal basis.
This waiver of liability includes, but is not limited to, loss of anticipated profits, benefits of use, or loss of business. This holds true even if the Franchisor's Affiliate was aware of the potential for such damages to occur. The document emphasizes that this exclusion of consequential damages is an independent agreement, separate from any sole or exclusive remedy applicable to the equipment.
For a prospective Aira Fitness franchisee, this means that if the leased equipment malfunctions or causes business interruption, the franchisee will likely not be able to recover damages beyond the cost of the equipment itself or direct losses. The franchisee bears the risk of any consequential losses, such as lost profits or business opportunities, stemming from equipment issues. This is a significant risk allocation that potential franchisees should carefully consider, as it could impact their financial stability in the event of equipment-related problems.
This type of clause is relatively common in franchise agreements, as franchisors and their affiliates often seek to limit their liability exposure. However, the specific scope and enforceability of such clauses can vary depending on state law and the specific circumstances of the case. Therefore, it is crucial for prospective Aira Fitness franchisees to consult with legal counsel to fully understand the implications of this provision and to assess their risk exposure.