NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_________________

No. 21-1033

GET KAISERED, INC., A New York Corporation; KAISER FITNESS LLC, A New 

York Limited Liability Company; ANNA KAISER, An Individual

v.

AKT FRANCHISE, LLC., A Delaware Limited Liability Company; XPONENTIAL 

FITNESS, LLC., A Delaware Limited Liability Company

AKT Franchise, LLC.,

Appellant

On Appeal from the United States District Court 

for the District of Delaware

(D.C. Civil No. 1-20-cv-01037)

District Judge: Hon. Colm F. Connolly

Argued June 22, 2021

Before: SMITH, Chief Judge, MATEY, and FISHER, Circuit Judges.

(Opinion filed: August 10, 2021)

Witt W. Chang

Jeffrey K. Logan

Alex M. Weingarten

Venable

2049 Century Park East

Suite 2300

Los Angeles, CA 90067
2

Bryan A. Garner [ARGUED]

14180 Dallas Parkway

Suite 280

Dallas, TX 75254

Counsel for Appellant

Kerry A. Brennan [ARGUED]

Brennan Law PLLC

902 Broadway, 6th Floor

New York, NY 10010

Counsel for Appellees

OPINION*

MATEY, Circuit Judge.

Xponential Fitness and AKT1 Franchise bought the right to franchise Anna Kaiser’s 

cardio fitness business and the intellectual property they hoped would make the new 

franchises thrive. But the relationship quickly soured, and lawsuits largely grounded on 

contract claims followed. Both sides sought preliminary injunctions, remedies largely

denied by the District Court. Agreeing that Appellant AKT Franchise has failed to show a 

likelihood of success on its claims, we will affirm.

I. BACKGROUND

Over two decades, Anna Kaiser developed a custom fitness program. By 2018, she 

operated four “AKT in Motion” studios in the New York area. With hopes of expansion, 

* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does 

not constitute binding precedent.

1 AKT is short for “Anna Kaiser Technique,” Kaiser’s unique fitness program.
3

Kaiser2 agreed to sell the franchise rights to her studios and much of the intellectual 

property related to her business to Xponential Fitness and a new company, AKT Franchise 

LLC. The parties spelled out the deal in an Asset Purchase Agreement (“APA”) that, 

among other terms, granted Kaiser a non-transferable, non-exclusive license to use the

intellectual property, and her persona, in her existing AKT in Motion studios. But that 

license came with a condition: those studios must become franchises, and the APA 

contained a restrictive covenant prohibiting the selling parties from operating competing 

businesses for five years after closing. That license forms the heart of this dispute. 

Trouble began, as commercial troubles often do, when the buyers failed to make 

two post-closing cash payments. Kaiser and the sellers tried to scuttle the deal, suing for 

breach of contract and changing the names of the existing studios to “Anna Kaiser Studios.”

The buyers fought back with counterclaims of breach. Both parties sought preliminary 

injunctions with AKT Franchise and Xponential seeking to enjoin Kaiser from operating 

her original studios because, they alleged, her operation of the studios outside the AKT 

franchise violated the APA’s restrictive covenant. The District Court denied both motions, 

finding neither side showed a likelihood of success on their claims. AKT Franchise timely 

appealed.3

2 Along with her companies AKT in Motion and Get Kaisered, Inc., the Appellees.

3 AKT Franchise’s co-defendant/co-counterclaimant Xponential is not a party to this 

appeal. The District Court had jurisdiction pursuant to 28 U.S.C. § 1332, and we have 

jurisdiction to review an order refusing injunctive relief under 28 U.S.C. § 1292(a)(1). We 

review the denial of a preliminary injunction for an abuse of discretion, but any underlying 

legal questions are subject to plenary review. ADP, LLC v. Rafferty, 923 F.3d 113, 119 (3d 

Cir. 2019). Under Delaware law, the “proper construction” of a contract is a question of 
4

II. DISCUSSION

As the party seeking a preliminary injunction, AKT Franchise must “demonstrate a 

reasonable likelihood of success [on its breach of contract claims] and that it would likely 

suffer irreparable harm absent an injunction.” ADP, LLC v. Rafferty, 923 F.3d 113, 119–

20 (3d Cir. 2019). Here, success depends on two questions: 1) whether the APA required 

Appellees to operate Kaiser’s studios as AKT franchises, and 2) whether the Anna Kaiser 

Studios are “competing businesses” under the APA. Because we agree with the District 

Court’s conclusion that Appellant failed to establish a likelihood of success on either 

question, we will affirm.

A. The Franchise Requirement

Section 5.11(a) of the APA provides that the Purchaser (Appellant) must grant the 

Seller (Appellees) a “non-exclusive, non-transferable” license back of the transferred AKT

intellectual property “to be used for the exclusive purpose of the [Seller] maintaining and 

operating its current ‘AKT in Motion’ studios . . . (‘the Seller Studios’).”4 The provision 

adds that the license is granted “provided that the Seller shall cause the AKT Group to 

operate all of the Seller Studios as franchises of the Purchaser in the Ordinary Course of 

Business. Following the Closing, Purchaser and Seller . . . shall use commercially 

law. Exelon Generation Acquisitions, LLC v. Deere & Co., 176 A.3d 1262, 1266–67 (Del. 

2017).

4 Section 5.11(a) refers to the “current ‘AKT in Motion’ studios” as “Current 

Studios,” and provides for the creation of at least two new “Additional Studios,” with the 

Current Studios and Additional Studios collectively labeled “Seller Studios.” (App. at 

1345.) No Additional Studios were ever opened, so the Current Studios alone are the Seller 

Studios. For simplicity, we will call them Seller Studios.
5

reasonable efforts to enter written Franchise Agreements for the Seller Studios[.]” (App. at 

1345.) But if “such Franchise Agreements are not executed by the third (3rd) anniversary 

of the date hereof,” the license terminates. (App. at 1345.)

Appellant argues the provision in Section 5.11(a) requiring that Kaiser’s studios 

operate as AKT franchises did not just condition the IP license, but created an affirmative 

promise to operate the studios as franchises or not at all. Like the District Court, we 

disagree. The proviso is best read as creating a condition precedent, “an event, not certain 

to occur, which must occur . . . before performance under a contract becomes due.” Pac. 

Emp’rs. Ins. Co. v. Glob. Reins. Corp. of Am., 693 F.3d 417, 430 n.6 (3d Cir. 2012) (quoting 

Restatement (Second) of Contracts § 224 (1981)). Appellant’s obligation to perform—to 

grant Kaiser the IP license—was dependent upon her execution of franchise agreements.

If no such agreements were executed by the third anniversary of the closing, the result was 

clear: the license would simply terminate. The APA did not provide that Kaiser had to then 

cease operating her studios altogether.

Appellant also believes Section 5.11(a) to immediately, upon closing, require the 

Appellees to operate the Seller Studios as AKT franchises. Not so, say Appellees; they just

had to use commercially reasonable efforts to enter written Franchise Agreements within 

three years of closing. And like the District Court, we agree the Appellees have the better 

interpretation. While Section 5.11(a) does grant Appellees a license to use AKT 

Franchise’s newly acquired intellectual property to operate the Seller Studios as franchises,

the clause includes a three-year period to fulfill that obligation.
6

That conclusion is confirmed by the whole text of the APA. Section 2.4 of the 

Consulting Agreement, Exhibit B to the APA,5 says, “Nothing in this Section 2.4 shall 

prohibit [Kaiser] from . . . owning or operating any ‘AKT in Motion’ studio or franchise.”

(App. at 1373 (emphasis added).) Under Appellant’s argument, the Seller Studios—which 

were the only existing AKT in Motion studios at closing—would automatically become 

franchises when the deal closed. But if that is correct, there would be no AKT in Motion 

studios that were not franchises after the contract was signed, making “studio or” 

superfluous. Such a reading would violate “our duty to give effect, if possible, to every 

clause and word” in a written text. United States v. Jackson, 964 F.3d 197, 203 (3d Cir. 

2020) (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)). Here, post-closing, the 

Consulting Agreement contemplated that Kaiser could operate an AKT in Motion franchise 

or a non-franchise AKT in Motion studio. That conflicts with Appellant’s reading of 

Section 5.11(a), but squares with the meaning “determined from the four corners of the 

contract.” In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Prod. Liab. 

Litig., 706 F.3d 217, 223 (3d Cir. 2013) (quotations and citation omitted).

Because the best reading of the APA suggests that the IP license did not condition 

Appellees’ freedom to operate and that Appellees were not required to immediately operate 

the Seller Studios as AKT franchises, Appellant has not shown a likelihood of success. The 

District Court correctly denied the motion for a preliminary injunction.

5 Under the APA, “the Exhibits attached hereto form part of this Agreement.” (App. 

at 1353.)
7

B. The Noncompete Clause

Appellant’s argument about the alleged breach of the APA’s restrictive covenant 

similarly falls short.

6 Section 5.4 of the APA prohibits Appellees from engaging in an 

extensive list of activities related to any “Competing Business” in North America, with 

“Competing Business” defined as “the operation or franchising of fitness studios other than 

Seller Studios.” (App. at 1342.) Despite the Seller Studios’ exemption from the definition 

of Competing Business, Appellant argues that Anna Kaiser Studios do not qualify because 

they are not AKT franchises.

But the Seller Studios are, per the definition of Current Studios, the Sellers’ “current 

‘AKT in Motion’ studios set forth in Schedule 5.11(a).” (App. at 1345.) Schedule 5.11(a) 

contains only a list of general locations and street addresses for four studios. And we have 

held that a contract written in the present tense is “speaking on” the date of closing, Castle 

v. Cohen, 840 F.2d 173, 177 (3d Cir. 1988), so the definition of Seller Studios refers to the 

AKT in Motion studios, listed in Schedule 5.11(a). When interpreting an unambiguous 

contract governed by Delaware law, we ask “what a reasonable person in the position of 

the parties would have thought the language of [the] contract means.” Lorillard Tobacco 

Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006). And a reasonable person would 

infer the word “current” matters to the definition of Seller Studios. Because the relevant 

time is the moment of closing, it does not matter that Appellees later rebranded the studios.

6 Appellant expressly disclaims any argument that the APA is ambiguous, thus 

confining our review to whether the APA unambiguously supports Appellant’s reading.
8

They are still the same studios7 listed in Schedule 5.11(a), so they are exempt from the 

APA’s restrictive covenant, and there is no likelihood of success on this claim. 

III. CONCLUSION

For these reasons, we will affirm the District Court’s denial of Appellant’s motion 

for a preliminary injunction.

7 Except for one studio that closed in 2020.