After termination of an Aira Fitness franchise, what is the geographic scope of the non-compete agreement, excluding the Development Area?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
rs of the obligations of the covenants not to compete contained in this Development Agreement except where we shall expressly authorize in writing.
9. POST-TERMINATION COVENANTS
- 9.1 Unless otherwise specified, the term "Developer" as used in this Section 9 shall include each and every Owner of Developer.
- 9.2 Developer specifically acknowledges that, pursuant to this Agreement, Developer will have access to the Confidential Information. Accordingly, Developer covenants that Developer and its Owners shall not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or entity:
- (a) own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any Competitive Business or any entity which is franchises, licenses or develops Competitive Businesses 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 Franchisor. You acknowledge and agree that, after the date of this Agreement, other Aira Fitness Centers may open, thereby expanding the geographical area in which you will not be able to compete with us. For purposes of this Section 9, a "Competitive Business" is defined as any fitness center, studio or exercise facility;
- (b) directly or indirectly divert or attempt to divert any former business or customer of a Aira Fitness Center to any competitive business; and
- (c) employ or seek to employ any person employed by us or our affiliate or by any other Aira Fitness Center franchisee, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment;
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, after the termination or expiration of the agreement, a franchisee is restricted from engaging in competitive business activities. Specifically, the franchisee cannot own, maintain, operate, engage in, consult with, or have any interest in a Competitive Business within a ten (10) mile radius of any existing Aira Fitness Center, excluding the Development Area. This restriction applies for a period of two (2) years. A Competitive Business is defined as any fitness center, studio, or exercise facility.
This post-termination covenant is designed to protect Aira Fitness's market and confidential information. The geographic restriction ensures that former franchisees do not directly compete with existing Aira Fitness centers, while the two-year period provides a reasonable timeframe for Aira Fitness to secure its customer base and proprietary information against potential exploitation by a former franchisee. The agreement also specifies that owning two percent (2%) or less of a publicly traded franchisor will not be deemed a prohibited activity.
Prospective Aira Fitness franchisees should be aware of these restrictions and carefully consider their implications. The ten-mile radius can significantly limit business opportunities after leaving the Aira Fitness system, and the two-year duration could impact long-term career plans. It is also important to note that the non-compete agreement may be modified by a court to ensure it is valid and enforceable. Franchisees should seek legal counsel to fully understand the scope and enforceability of these covenants in their specific jurisdiction.