What happens if a court modifies the non-competition restrictions in the Aira Fitness agreement?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
cago, 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.
Any unappealed decision of the arbitrator(s) will be final and binding on all parties to the dispute; however, the arbitrator(s) shall have no authority to: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; (iii) certify a class or consolidate an action, or (iv) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set. A judgment may be entered upon the arbitration award by any court of competent jurisdiction.
We and you agree to be bound by the provisions of any limitation on the period of time by which claims must be brought under this Agreement or applicable law, whichever expires first. We and you further agree that, in connection with any arbitration proceeding, each party must submit or file any claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding will be barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us. We reserve the right, but have no obligation, to advance your share of the costs of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will not be deemed to have waived or relinquished our right to seek the recovery of those costs in accordance with Section 13.D. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration under this Section 13 without the prior written consent of both parties. The provisions of this Section are intended to benefit and bind certain third-party non- signatories and will continue in full force and effect subsequent
to and notwithstanding the expiration or termination of this Agreement.
Any award rendered by the arbitrator(s) may be appealed pursuant to the AAA's Optional Appellate Arbitration Rules in effect as of the Effective Date of this agreement ("Appellate Rules").
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document, any arbitrator is prohibited from making any award which extends, modifies, or suspends any lawful term of the Franchise Agreement or any reasonable standard of business performance that Aira Fitness sets. This means that an arbitrator cannot alter the non-compete terms outlined in the agreement.
However, the FDD also states that in the event a court or arbitrator determines that the exclusion of multiparty arbitration (including class arbitration) is unenforceable, then the entire commitment to arbitrate will be null and void and the parties must submit all claims to the jurisdiction of the courts. This clause suggests that if a court modifies the non-competition restrictions, the standard arbitration process may become void, and disputes would then be resolved through the court system.
This has significant implications for a franchisee because it means that disputes over the non-compete agreement could end up in court rather than in arbitration, which is generally considered a faster and less expensive process. Franchisees should seek legal counsel to understand the full implications of these clauses and how they might affect their rights and obligations under the Aira Fitness Franchise Agreement.