For how long after the expiration or termination of the Aira Fitness agreement are Developers restricted from engaging in competitive businesses?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.2 Developer specifically acknowledges that, pursuant to this Agreement, Developer will have access to the Confidential Information. Accordingly, Developer covenants that Developer and its Owners shall not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or entity:
- (a) own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any Competitive Business or any entity which is franchises, licenses or develops Competitive Businesses within the Development Area, or within a ten (10) mile radius of any existing Aira Fitness Center, except under a validly existing Franchise Agreement with Franchisor. You acknowledge and agree that, after the date of this Agreement, other Aira Fitness Centers may open, thereby expanding the geographical area in which you will not be able to compete with us. For purposes of this Section 9, a "Competitive Business" is defined as any fitness center, studio or exercise facility;
- (b) directly or indirectly divert or attempt to divert any former business or customer of a Aira Fitness Center to any competitive business; and
- (c) employ or seek to employ any person employed by us or our affiliate or by any other Aira Fitness Center franchisee, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment;
The ownership of two percent (2%) or less of a publicly traded Franchisor will not be deemed to be prohibited by this paragraph.
- 9.3 Court Modification of Agreement**.** You agree that this form of Agreement is prepared for use in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, a Developer is restricted from engaging in competitive businesses for two years after the expiration or termination of the agreement. This restriction applies regardless of the reason for termination. This post-termination covenant extends not only to the Developer but also to each of their Owners.
During this two-year period, the Developer and their Owners are prohibited from owning, maintaining, operating, consulting with, or having any interest in a Competitive Business within the Development Area or within a ten-mile radius of any existing Aira Fitness Center. A Competitive Business is defined as any fitness center, studio, or exercise facility. Additionally, they cannot divert or attempt to divert any former business or customer of an Aira Fitness Center to a competitive business, nor can they employ or seek to employ anyone working for Aira Fitness, its affiliates, or any other Aira Fitness franchisee.
It is important to note that owning two percent or less of a publicly traded Franchisor is not prohibited. The FDD also states that these non-competition restrictions may be modified by a court to ensure they are valid and enforceable. This acknowledges the varying public policies across different jurisdictions and the potential need for adjustments to the agreement.
This non-compete clause is designed to protect Aira Fitness's confidential information and market presence. Prospective franchisees should carefully consider the implications of this restriction, especially if they have prior experience or future aspirations in the fitness industry. Understanding the scope and enforceability of this covenant is crucial before entering into a franchise agreement with Aira Fitness.