What are the potential consequences for an Aira Fitness franchisee if the Franchise Agreement is terminated with cause?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The following statements are added to Item 17.h.:
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement does not constitute "reasonable cause, "as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."
- Section 4.B. of the Franchise Agreement on "Renewal Term and Conditions of Renewal" and Section 12.C. of the Franchise Agreement on "Conditions of Transfer" are amended by the addition of the following language to the original language that appears therein:
"The execution of a general release upon renewal, assignment or termination shall be inapplicable to franchises operating under the North Dakota Franchise Investment Law."
- Section 11.D.3. of the Franchise Agreement on "Non-Compete Covenants – After Termination" is amended by the addition of the following language to the original language that appears therein:
"Covenants not to compete such as those mentioned above are generally unenforceable in the State of North Dakota."
For Hawaii franchisees, the conditions under which the franchise can be terminated and rights upon nonrenewal may be affected by Hawaii Revised Statutes, Section 482E-6.
Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
Illinois law governs the Franchise Agreement and Multi-Unit Development Agreement. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Source: Item 17 — **RENEWAL, TERMINATION,TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 48–54)
What This Means (2025 FDD)
Based on the 2025 Aira Fitness Franchise Disclosure Document addenda, the consequences of termination with cause are subject to state-specific laws that may modify the standard franchise agreement.
For instance, in Virginia, the grounds for termination must constitute "reasonable cause" as defined by the Virginia Retail Franchising Act; otherwise, the termination provision may not be enforceable. In North Dakota, covenants not to compete after termination are generally unenforceable, meaning Aira Fitness may not be able to prevent a former franchisee from opening a competing business.
In states like Hawaii and Illinois, the franchisee's rights upon termination are specifically protected by state statutes, such as Hawaii Revised Statutes Section 482E-6 and sections 19 and 20 of the Illinois Franchise Disclosure Act. Furthermore, Illinois law voids any provision that designates jurisdiction and venue outside of Illinois, although arbitration outside the state may be permitted. These state-specific addenda highlight the importance of understanding the legal landscape in the franchisee's particular state, as the standard Aira Fitness franchise agreement is subject to local regulations that can significantly alter the franchisee's rights and obligations upon termination.