For how long do the franchisee's covenants and indemnities 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 2025 Aira Fitness Franchise Disclosure Document (FDD) outlines post-termination covenants that extend for a specific duration after the franchise agreement ends. Specifically, the franchisee, referred to as "Developer," and their owners are subject to certain restrictions for two years following the expiration or termination of the agreement. These restrictions apply regardless of the reason for termination.
During this two-year period, the franchisee is prohibited from engaging in any competitive business within the Development Area or within a 10-mile radius of any existing Aira Fitness Center. This includes owning, operating, consulting with, or having any interest in a fitness center, studio, or exercise facility that competes with Aira Fitness. The franchisee is also barred from diverting or attempting to divert any former business or customers of an Aira Fitness Center to a competitive business, and from employing or soliciting employees of Aira Fitness or its franchisees.
It is important to note that these non-compete restrictions may be modified by a court to ensure they are valid and enforceable. The FDD emphasizes that these covenants are in place to protect Aira Fitness's confidential information and business interests. While the FDD specifies the duration of these post-termination covenants related to competitive activities, it does not explicitly state how long the franchisee's indemnities survive the termination of the Aira Fitness lease. A prospective franchisee should seek clarification from Aira Fitness regarding the survival period of these indemnities to fully understand their obligations after the lease ends.