After termination of the Aira Fitness agreement, what is the geographic scope of the non-compete restriction for Aira Fitness franchisees?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two years after the transfer, expiration or termination of this Agreement (and with respect to any Owner, for a period of two years after such person ceases to be an Owner, regardless of the reason), Covered Persons must not directly or indirectly, for themselves or through, on behalf of or in conjunction with any individual or business entity: (i) divert any Aira Fitness Business member, potential Aira Fitness Business member or former Aira Fitness Business member to any exercise facility except another Aira Fitness Business; or (ii) own, operate, lease, franchise, engage in, be connected with, have any interest in, or assist any person or entity engaged in any other exercise facility (including, but not limited to a 24/7 fitness center, studio or exercise facility; a fitness center, studio or exercise facility featuring keycard access or a structured fitness/training program or complete body overhaul program for individuals) that is located at or within a 10-mile radius of the Authorized Location, that is located within a 10-mile radius of any other Aira Fitness Business in operation or under construction, or that is located in the Designated Area of any other AIRA FITNESS franchisee.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, after the termination of the franchise agreement, the franchisee and other covered persons are subject to a non-compete agreement for two years. This prevents them from engaging in or being connected with any other exercise facility. The geographic scope of this restriction includes the area at or within a 10-mile radius of the Aira Fitness location, within a 10-mile radius of any other Aira Fitness Business in operation or under construction, or within the Designated Area of any other Aira Fitness franchisee. The non-compete also restricts the franchisee from diverting Aira Fitness Business members, potential members, or former members to another exercise facility, unless it is another Aira Fitness Business.
This post-termination covenant is designed to protect Aira Fitness's market and confidential information. The FDD states that the franchisee acknowledges that other Aira Fitness Centers may open after the agreement, expanding the geographical area in which they will not be able to compete. This means the non-compete area could grow over time as the Aira Fitness system expands.
It is important to note that the two-year non-compete period can be extended if the franchisee violates the agreement. The agreement also states that a court may modify the non-competition restrictions to make them valid and enforceable. This suggests that the specific terms of the non-compete could be subject to legal interpretation and adjustment depending on the jurisdiction and circumstances. Aira Fitness also restricts franchisees from employing or seeking to employ any person employed by them or any other Aira Fitness franchisee.