After termination of the Aira Fitness agreement, are there any circumstances under which the non-compete period can be extended?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
After Termination.
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 the 2025 FDD, the non-compete period for Aira Fitness can be extended under specific circumstances. The standard non-compete period is two years after the termination, transfer, or expiration of the agreement. This restriction applies to Covered Persons, which include owners and other individuals with an ownership interest in the franchise.
However, the two-year non-compete period can be extended if the franchisee is in noncompliance with the agreement. Specifically, the FDD states, "The two-year period described in this paragraph will be tolled during any period of noncompliance." This means that if a franchisee violates the non-compete terms, the period of noncompliance will be added to the original two-year restriction, effectively extending the time during which the franchisee is prohibited from engaging in competitive activities.
This extension provision is significant for prospective Aira Fitness franchisees because it means that any violation of the non-compete agreement can result in a longer period of restriction than initially agreed upon. Franchisees should ensure they fully understand and comply with the non-compete terms to avoid unintentionally extending their post-termination obligations. This is a fairly standard practice in franchising, as franchisors aim to protect their brand and market share.