If Aira Fitness's affiliate incurs legal costs related to the Pod, is the franchisee responsible for reimbursing those costs?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall indemnify and hold Franchisor's Affiliate harmless from and against all claims, losses, liabilities (including, but not limited to, negligence, tort, breaches of statutory duties, and strict liability), damages, judgments, suits, and all legal proceedings, and any and all costs and expenses in connection therewith (including attorneys' fees) arising out of or in any manner related to the manufacture, purchase, financing, ownership, delivery, rejection, non-delivery, possession, use, transportation, storage, operation, maintenance, repair, return or other disposition of the Pod or with this Lease, including, without limitation,(a) claims for injury to or death of persons and for damage to property, (b) claims relating to patent, copyright, or trademark infringement, and (c) claims relating to defects in the equipment whether or not discoverable by Franchisor's Affiliate.
Franchisee agrees to give Franchisor's Affiliate prompt notice of any such claim or liability.
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 indemnify and hold Franchisor's Affiliate harmless from claims, losses, and liabilities related to the Pod. This includes legal proceedings and associated costs and expenses, including attorney's fees. This obligation extends to issues related to the manufacture, purchase, financing, ownership, delivery, rejection, non-delivery, possession, use, transportation, storage, operation, maintenance, repair, return, or other disposition of the Pod. The franchisee must also promptly notify Franchisor's Affiliate of any such claim or liability.
This means that if Aira Fitness's affiliate incurs legal costs due to any of the listed issues related to the Pod, the franchisee is responsible for covering those costs. This indemnification clause places a significant financial burden on the franchisee, as they could be liable for substantial legal fees and other expenses arising from situations beyond their direct control.
Furthermore, the franchisee's responsibility extends to claims for injury to or death of persons and for damage to property, claims relating to patent, copyright, or trademark infringement, and claims relating to defects in the equipment whether or not discoverable by Franchisor's Affiliate. This broad scope of liability means that franchisees need to be aware of potential risks associated with the Pod and ensure they have adequate insurance coverage to protect themselves from potential claims.
In the context of the Pod purchase agreement, the franchisee is purchasing the Pod from Franchisor's Affiliate for $40,000, with the equipment accepted "AS IS". The franchisee also indemnifies and holds Franchisor's Affiliate harmless in connection with any third-party claims involving or relating to the Equipment, its use and/or its performance and any costs, expenses, damages, and other liabilities of any kind or nature arising out of or relating to any such claims. This further emphasizes the franchisee's responsibility for any legal or financial issues related to the Pod.