Under what circumstances related to default or termination notices are disputes with Aira Fitness not subject to arbitration or mediation?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
ou must give us written notice at least thirty (30) days prior to the date of commencement of any offering or other transaction covered by this Section.
13. DISPUTE RESOLUTION
A. Arbitration; Mediation. Except as qualified below, any dispute between you and us and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease for the Aira Fitness Business or Authorized Location, the parties' relationship, the Aira Fitness Business, our Standards, or the scope or validity of the arbitration obligations under this Section must be submitted to binding arbitration under the authority of the Federal Arbitration Act and must be arbitrated in accordance with the then-current rules and procedures and under the auspices of the American Arbitration Association ("AAA"). Any arbitration must be on an individual basis, and not as part of a consolidated, common, or class action, and you and/or your Owners waive any right to proceed on a consolidated, common, or class basis. Multiparty arbitration is specifically excluded, and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action or otherwise to join or consolidate any claim with any claim or other proceeding involving third parties. In the event a court or arbitrator determines that this exclusion of multiparty arbitration (including class arbitration) is unenforceable, then this entire commitment to arbitrate will be null and void and the parties must submit all claims to the jurisdiction of the courts. Arbitration shall take place in the Chicago, Illinois metropolitan area. The arbitrators must follow the law and not disregard the terms of this Agreement. Any arbitrator must have at least five years' experience in franchising or in franchise law.
Any unappealed decision of the arbitrator(s) will be final and binding on all parties to the dispute;
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, not all disputes are subject to arbitration or mediation. Specifically, if a court or arbitrator determines that the exclusion of multiparty arbitration (including class arbitration) is unenforceable, then the entire commitment to arbitrate becomes null and void. In such cases, all claims must be submitted to the jurisdiction of the courts.
This means that if a franchisee seeks to bring a class action lawsuit against Aira Fitness, and the court or arbitrator finds that the clause preventing class action arbitration is unenforceable, the dispute will be resolved in court rather than through arbitration. This could be significant for franchisees who believe they have a claim that is best pursued as part of a larger group.
Furthermore, Aira Fitness retains the right to institute actions against a franchisee in any state or federal court located in the State of Illinois for matters not required to be arbitrated under the agreement or for which arbitration has been waived. This clause ensures that Aira Fitness can pursue legal action against franchisees in court under certain circumstances, maintaining some control over the dispute resolution process. Franchisees, on the other hand, irrevocably submit to the exclusive jurisdiction or venue of such courts in Illinois, which could present logistical and financial challenges for franchisees located outside of Illinois.