What happens if the Aira Fitness franchisee fails to maintain the required insurance?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not procure and maintain the insurance coverage required by this Agreement, we have the right, but not the obligation, to procure insurance coverage and to charge the same to you, together with the actual costs and expenses we incur in doing so, payable by you immediately upon notice.
- 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;
All insurance policies must be written by an insurance company or companies satisfactory to us (generally, companies with an AM Best rating of A- or better). We may require you to purchase insurance from a supplier we have approved. You must participate in any insurance plan we establish for the benefit of the System and pay all required premiums due there under, unless we agree otherwise in writing. We also may modify the required minimum limits from time to time and by written notice to you, as conditions require, to reflect changes in relevant circumstances, industry standards, experiences in the AIRA FITNESS system, standards of liability and higher damage awards.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage throughout the term of the agreement. This includes special/causes of loss coverage, business interruption insurance, comprehensive general liability insurance with minimum limits of at least $1,000,000 per occurrence and $2,000,000 aggregate, automobile liability insurance with a minimum combined single limit of at least $1,000,000 per claim, workers' compensation and employer's liability insurance, professional liability insurance with a minimum limit of at least $1,000,000 per occurrence, Commercial Umbrella Liability of at least $10,000,000 per occurrence and $10,000,000 aggregate, cyber liability with minimum limits of at least $25,000 per occurrence, medical expense coverage of at least $1,000 per accident, crime insurance with minimum limits of at least $10,000 per occurrence and employment practices liability with minimum limits of at least $100,000 per occurrence.
If an Aira Fitness franchisee fails to maintain the required insurance coverage, Aira Fitness has the right, but not the obligation, to procure insurance coverage on behalf of the franchisee. The franchisee is then responsible for reimbursing Aira Fitness for the costs and expenses incurred in obtaining this insurance, payable immediately upon notice.
The insurance policies must be written by an insurance company satisfactory to Aira Fitness, generally those with an AM Best rating of A- or better. Franchisees may be required to purchase insurance from an Aira Fitness-approved supplier and participate in any insurance plan established by Aira Fitness for the benefit of the system, paying all required premiums. Franchisees must provide Aira Fitness with certificates or documentation evidencing the insurance coverage and compliance with the agreement, including providing 30 days' prior written notice of any material change, termination, or cancellation of the policy. Aira Fitness can also modify the required minimum limits from time to time by written notice to the franchisee.