For how long do the franchisee's covenants, indemnities, representations, and warranties survive the termination of the Aira Fitness lease?
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)
The Aira Fitness 2025 Franchise Disclosure Document (FDD) states that certain obligations of the franchisee extend beyond the termination of the franchise agreement. Specifically, the franchisee is subject to post-termination covenants for a period of two years after the agreement's expiration or termination. These covenants include restrictions on engaging in competitive businesses, soliciting customers, and employing or soliciting employees of Aira Fitness or its franchisees. These restrictions apply to the franchisee and their owners.
According to the FDD, these post-termination covenants are designed to protect Aira Fitness's confidential information, customer relationships, and employee base. The restrictions prevent a former franchisee from leveraging the knowledge and resources gained during their time with Aira Fitness to unfairly compete with the brand. The FDD also states that the franchisee acknowledges that the restrictions are reasonable and necessary to protect Aira Fitness and the System.
It is important to note that the enforceability of non-compete agreements can vary by jurisdiction. The Aira Fitness FDD acknowledges this and states that a court may modify the non-competition restrictions to the extent necessary to make them valid and enforceable. This means that the specific terms of the post-termination covenants could be subject to change depending on the laws of the franchisee's location.
While the FDD specifies the duration of certain post-termination covenants related to competition, it does not explicitly state how long all of the franchisee's covenants, indemnities, representations, and warranties survive the termination of the Aira Fitness lease. A prospective franchisee should seek clarification from Aira Fitness regarding the survival period of all obligations beyond the lease termination.