What are the consequences if an Aira Fitness franchisee fails to maintain the required insurance for the Pod as outlined in § 6(b), or fails to repair or replace a Pod after material uninsured damage, loss, theft, or destruction?

According to Aira Fitness's 2025 Franchise Disclosure Document, failure to maintain required insurance or to repair/replace a damaged Pod can lead to significant consequences for the franchisee. Specifically, if a franchisee fails to keep the Pod insured as required by § 6(b), or does not repair or replace a Pod that has suffered material uninsured damage, loss, theft, or destruction, it constitutes an Event of Default under the lease agreement.

In the event that the franchisee fails to obtain the necessary insurance, Aira Fitness's Affiliate has the option to either obtain the insurance themselves or declare the franchisee in default. If the Affiliate chooses to obtain the insurance, the franchisee is responsible for promptly reimbursing the Affiliate for all costs incurred, including reasonable administrative costs.

Being declared in default has serious implications, potentially leading to termination of the lease agreement and loss of the franchise. Therefore, maintaining adequate insurance coverage and promptly addressing any damage or loss to the Pod are critical responsibilities for an Aira Fitness franchisee.