Can Aira Fitness unreasonably withhold approval of a franchisee's transfer?

According to the 2025 Aira Fitness FDD, the franchisor's right to assign its obligations is limited in New York. Specifically, Paragraph 12(F) of the Franchise Agreement, which addresses transfer by the franchisor, is amended for New York franchisees. The amendment states that Aira Fitness cannot assign its rights and obligations to a transferee unless, in its reasonable judgment, the transferee can fulfill Aira Fitness's obligations under the Franchise Agreements. This clause ensures that Aira Fitness must act reasonably when transferring its obligations, providing some protection to franchisees.

This provision is particularly important for franchisees in New York as it prevents Aira Fitness from transferring its obligations to an entity that is not capable of fulfilling them. This could safeguard the franchisee's investment and the ongoing operation of their Aira Fitness franchise. By requiring Aira Fitness to make a reasonable judgment about the transferee's ability to meet the franchisor's obligations, the addendum aims to maintain the quality and consistency of the Aira Fitness brand and support system.

It is important to note that this specific protection regarding reasonable judgment in transfer applies to the franchisor's transfer of obligations, not necessarily the franchisee's transfer. The FDD does not explicitly state whether Aira Fitness can unreasonably withhold approval of a franchisee's transfer, but the New York addendum does modify Paragraph 12(C) of the Franchise Agreement on Conditions to Transfer, ensuring that franchisees retain all rights and causes of action arising from Article 33 of the General Business Law of the State of New York. This suggests that New York franchisees may have additional protections under state law regarding transfer conditions.