What are the insurance requirements for the Pod that an Aira Fitness franchisee must maintain to avoid an Event of Default?

According to Aira Fitness's 2025 Franchise Disclosure Document, franchisees must maintain specific insurance coverage throughout the term of their agreement. This insurance coverage is deemed necessary for liabilities caused by or occurring in connection with the development or operation of the Aira Fitness Business.

The required insurance includes special/causes of loss coverage forms, including mechanical/equipment breakdown, 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. Franchisees must also carry business interruption insurance covering a minimum 12 months loss of income, written on an actual loss sustained basis, including coverage for Aira Fitness's monthly fees, with Aira Fitness named as a loss payee with respect to those fees. 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 is also required.

Additional insurance requirements include automobile liability insurance with a minimum combined single limit of at least $1,000,000 per claim, workers' compensation and employer's liability insurance as required by state statute, professional liability insurance, including abuse and molestation, with a minimum limit of at least $1,000,000 per occurrence, and 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. Cyber liability with minimum limits of at least $25,000 per occurrence, medical expense coverage of at least $1,000 per accident, crime (employee dishonesty, theft and robbery) with minimum limits of at least $10,000 per occurrence, and employment practices liability with minimum limits of at least $100,000 per occurrence and inclusive of both first and third party coverage are also mandated. Aira Fitness Franchising LLC and any entity with an insurable interest that Aira Fitness designates must be an additional insured on all liability policies required. Each policy of insurance maintained must contain a waiver of subrogation in favor of the Additional Insureds.

All insurance policies must be written by an insurance company or companies satisfactory to Aira Fitness, generally those with an AM Best rating of A- or better. Aira Fitness may require franchisees to purchase insurance from an approved supplier and participate in any insurance plan established for the benefit of the System, paying all required premiums. Franchisees must provide evidence of insurance coverage at commencement and annually, with a 30-day notice to Aira Fitness for any changes or cancellation of the policy. Aira Fitness may modify the required minimum limits from time to time to reflect changes in circumstances, industry standards, or experiences within the Aira Fitness system. Failure to maintain the required insurance coverage gives Aira Fitness the right, but not the obligation, to procure insurance coverage and charge the costs to the franchisee.