Does the Aira Fitness in-term non-competition agreement allow me or my owners to hold interests in competitive businesses?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
6.4 In-Term Non-Competition Agreement. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure and would be unable to encourage a free exchange of ideas and information between you and us if you or your Owners were permitted to hold interests in any competitive businesses, as described below. You also acknowledge that we have entered into this Agreement with you in part in consideration of, and in reliance on, your agreement to deal exclusively with us. Therefore, during the term of this Agreement, neither you, nor any Owner, may, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with, any person or legal entity, own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any business which offers products or services which are the same as, or similar to, those offered by a Aira Fitness Center (other than through a franchise agreement with Franchisor), or any entity which is granting franchises or licenses for any business which offers products or services which are the same as, or similar to, those offered by a Aira Fitness Center. (The ownership of five percent (5%) or less of a publicly traded Franchisor will not be deemed to be prohibited by this paragraph.) Further, during the term of this Agreement, you will not (1) divert customers or business from any Aira Fitness Centers to any other business or (2) hire any employees of ours or our affiliates.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, during the term of the franchise agreement, franchisees and their owners are generally prohibited from holding interests in competitive businesses. A "Covered Person" which includes the franchisee, their owners, and other related parties, cannot directly or indirectly own, operate, or have any interest in another exercise facility in the United States, with the exception of another Aira Fitness Business operating under a valid franchise agreement with Aira Fitness. This restriction applies to various types of exercise facilities, including 24/7 fitness centers, studios, and facilities featuring keycard access or structured fitness programs.
However, there is an exception to this restriction. The ownership of five percent (5%) or less of a publicly traded franchisor that operates a competing business will not be deemed a violation of the in-term non-competition agreement. This allows franchisees and their owners to hold minor, passive investments in publicly traded companies that may have competing fitness businesses.
This non-compete agreement is in place to protect Aira Fitness's confidential information, encourage the free exchange of ideas within the Aira Fitness system, and ensure the franchisee's exclusive dedication to the Aira Fitness brand. Franchisees must also deal exclusively with Aira Fitness during the term of the agreement. Aira Fitness may also require franchisees to obtain a signed non-compete agreement from their owners and other related individuals, ensuring their commitment to these non-competition provisions.