After termination of the Aira Fitness agreement, for how long are Covered Persons restricted from competing?
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.
The two-year period described in this paragraph will be tolled during any period of noncompliance.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, after the Aira Fitness agreement is terminated, Covered Persons face a two-year non-compete restriction. This restriction applies to the period following the transfer, expiration, or termination of the agreement. For owners, the two-year period starts when they cease to be an owner, regardless of the reason for leaving. This non-compete clause is designed to protect Aira Fitness's business interests and system standards. The restriction can be extended if there is any period of non-compliance, effectively pausing the clock until compliance is restored.
The non-compete agreement prevents Covered Persons from diverting Aira Fitness Business members (potential, current, or former) to other exercise facilities, unless it's another Aira Fitness Business. It also prohibits owning, operating, leasing, franchising, or being involved with any other exercise facility within a 10-mile radius of the franchisee's authorized location, any other Aira Fitness Business in operation or under construction, or within the designated area of another Aira Fitness franchisee. This broad scope aims to prevent franchisees from using the training and information they received from Aira Fitness to compete against the brand or limit its ability to enter new markets.
Aira Fitness considers these restrictions reasonable and necessary to protect the company and its franchise system. The company emphasizes that franchisees receive substantial training and confidential information that they wouldn't otherwise have access to, justifying the non-competition covenants. The FDD states that the restrictions are designed to prevent franchisees from using this knowledge to compete with Aira Fitness or to impede the company's expansion into new markets. The agreement also notes that franchisees have other opportunities to earn a living and that these restrictions should not prevent them from engaging in other lawful trades or businesses for which they are qualified.
It is important for prospective franchisees to understand the full implications of this non-compete agreement. They should carefully consider the geographic scope and the types of activities that are restricted. Franchisees should also be aware that the two-year period can be extended if they fail to comply with the terms of the agreement. Given the breadth of these restrictions, prospective franchisees should seek legal counsel to fully understand their obligations and rights under the franchise agreement.