After termination or expiration of the Aira Fitness Development Agreement, can Aira Fitness establish a center within the Development Territory?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination or expiration of this Agreement, we will have the right to establish ourselves or through an affiliate or grant to a third party the right to establish a Aira Fitness Center within the Development Territory as long as there is no violation of the territorial protections granted to you under existing individual Franchise Agreements.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, upon termination or expiration of the Development Agreement, Aira Fitness has the right to establish a center, or grant a third party the right to establish a center, within the Development Territory. This is permitted as long as it does not violate any territorial protections granted to the franchisee under existing individual Franchise Agreements. This means that while the Development Agreement ends, any existing Aira Fitness franchise locations operating under separate Franchise Agreements retain their protected territories.
Furthermore, the Development Agreement also stipulates post-termination covenants that restrict the developer (franchisee) from engaging in competitive business activities. For a period of two years after the expiration or termination of the Development Agreement, the developer cannot own, operate, or have any interest in a Competitive Business 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 Aira Fitness. A "Competitive Business" is defined as any fitness center, studio, or exercise facility.
Additionally, the franchisee is prohibited from diverting business or customers from Aira Fitness to any competitive business, or from employing or soliciting employees of Aira Fitness or its franchisees. These restrictions are designed to protect Aira Fitness's market position and confidential information. The FDD also states that these non-competition restrictions may be modified by a court to ensure they are valid and enforceable.
However, the Development Agreement also provides a right of first refusal to the developer under certain conditions. Following the completion of the Development Schedule and the termination of the exclusive rights to the Development Area, if the developer is in full compliance with the Development Agreement, Aira Fitness must first offer the developer the option to establish any additional Aira Fitness Center within the Development Area before licensing it to others. The developer has thirty (30) days to exercise this option by executing the Franchise Agreement and paying the initial fee.