Have you gotten the Chad events?
All of the ones leading up to that point, I think. The most recent one was "Thursday", the one where Chad blows it onto the player.
But I don't get any options to research "Raise the limit" and thus automatically get the fail route in the next encounter.
Ok I'll check out oft here is a softlock or if something isn't clear there, if you send me your save id appreciate it to narrow it down
Have you finished the gym too?