Must the Aira Fitness franchisee's insurance policy contain cross-liability endorsements?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
e event you default in making any such payment, we are authorized, but not required, to pay the same on your behalf and you agree promptly to reimburse us on demand for any such payment.
- B. Insurance. You must maintain in full force and effect throughout the term of this Agreement that insurance which you determine is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of the Aira Fitness Business. Such insurance must include, at a minimum: (i) special/causes of loss coverage forms, including mechanical/equipment breakdown (previously called "All Risk coverage") on the Aira Fitness Business and all fixtures, equipment and other property used in the operation of the Aira Fitness Business, for full replacement value of the equipment and improvements; (ii) business interruption insurance covering a minimum 12 months loss of income, written on an actual loss sustained basis, including coverage for our monthly fees with us named as a loss payee with respect to those fees; (iii) comprehensive general liability insurance with minimum limits of at least $1,000,000 per occurrence and $2,000,000 aggregate (including product liability and personal and advertising injury) and "Per Location" aggregate limits when multiple Aira Fitness Business locations are insured under one comprehensive general liability policy; (iv) automobile liability insurance, including owned, hired and non-owned vehicle coverage with a minimum combined single limit of at least $1,000,000 per claim; (v) workers' compensation and employer's liability insurance covering all of your employees where required by state statute; (vi) professional liability insurance, including abuse and molestation, with a minimum limit of at least $1,000,000 per occurrence; (vii) Commercial Umbrella Liability of at least $10,000,000 per occurrence and $10,000,000 aggregate with "Per Location" aggregate limits when multiple Aira Fitness Business locations are insured under one comprehensive umbrella liability policy (viii) cyber liability with minimum limits of at least $25,000 per occurrence; (ix) medical expense coverage of at least $1,000 per accident; (x) crime (employee dishonesty, theft and robbery) with minimum limits of at least $10,000 per occurrence; (xi) employment practices liability with minimum limits of at least $100,000 per occurrence and inclusive of both first and third party coverage; (xii) AIRA Fitness Franchising LLC and any entity with an insurable interest that we designate (the "Additional Insureds") must be an additional insured on all liability policies required by this subparagraph to the extent each has an insurable interest; (xiii) each policy of insurance maintained pursuant to this Agreement mus
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
Based on the 2025 FDD, the insurance policies that Aira Fitness franchisees must maintain do not explicitly require cross-liability endorsements. However, Aira Fitness requires that all liability policies include Aira Fitness Franchising LLC and any entity with an insurable interest that Aira Fitness designates as additional insureds. Each policy must also contain a waiver of subrogation in favor of the additional insureds.
The FDD specifies minimum insurance coverage requirements, including comprehensive general liability insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate, automobile liability insurance with a minimum combined single limit of $1,000,000 per claim, and professional liability insurance with a minimum limit of $1,000,000 per occurrence. Additionally, franchisees must maintain commercial umbrella liability of at least $10,000,000 per occurrence and aggregate, cyber liability with minimum limits of at least $25,000 per occurrence, and crime insurance with minimum limits of at least $10,000 per occurrence.
It is important for prospective Aira Fitness franchisees to carefully review the insurance requirements outlined in the Franchise Agreement and consult with an insurance professional to ensure they obtain adequate coverage. Franchisees must also ensure that their insurance policies comply with all applicable laws and any other agreements related to the Aira Fitness Business. The franchisor can modify the minimum insurance limits from time to time, so franchisees must stay updated with any changes.
While cross-liability endorsements are not specifically mentioned, the requirement for additional insureds and waivers of subrogation suggests that the insurance policies should provide coverage for claims between the franchisee and Aira Fitness or its designated entities. Franchisees should seek clarification from Aira Fitness regarding whether a cross-liability endorsement is implicitly required to meet the additional insured and waiver of subrogation requirements.