What are the insurance responsibilities of an Aira Fitness franchisee regarding the Pod?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Insurance. Franchisee shall obtain and maintain for the entire term of this Lease, at its own expense (as primary insurance for Franchisor's Affiliate and Franchisee), property damage and liability insurance and insurance against loss or damage to the Pod including, without limitation, loss by fire (including so-called extended coverage), theft, collision and such other risks of loss as are customarily insured against on the type of Pod leased hereunder and by businesses in which Franchisee is engaged, in such amounts, in such form and with such insurers as shall be reasonably satisfactory to Franchisor's Affiliate provided, however, that the amount of insurance against loss or damage to the Pod shall be the replacement value of the Pod. Each insurance policy will name Franchisee as an insured and Franchisor's Affiliate as an additional insured and loss payee thereof as Franchisor's Affiliate's interests may appear, shall contain crossliability endorsements and shall contain a clause requiring the insurer to give Franchisor's Affiliate at least 30 days prior written notice of any material alteration in the terms of such policy or of the cancellation thereof. Franchisee shall furnish to Franchisor's Affiliate a certificate of insurance or other evidence satisfactory to Franchisor's Affiliate that such insurance coverage is in effect, provided, however, that Franchisor's Affiliate shall be under no duty either to ascertain the existence of or to examine such insurance policy or to advise Franchisee in the event such insurance coverage shall not comply with the requirements hereof. Franchisee further agrees to give Franchisor's Affiliate prompt notice of any damage to, or loss of, the Pod, or any part thereof; all insurance covering loss or damage to the Pod shall contain a breach of warranty clause satisfactory to Franchisor's Affiliate. In the event Franchisee fails to obtain insurance in accordance with this provision, the Franchisor's Affiliate may, at its option, obtain the insurance or declare Franchisee's failure an event of default. In the event that Franchisor's Affiliate obtains insurance, it shall be entitled to prompt reimbursement from the Franchisee of the costs, including reasonable administrative costs, of doing so.
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 obtain and maintain specific insurance coverage for the entire term of the lease. This insurance must cover property damage and liability, as well as loss or damage to the Pod itself. The coverage should protect against risks such as fire (including extended coverage), theft, and collision, and other risks typically insured against by similar businesses. The amount of insurance for loss or damage to the Pod must be equal to the Pod's replacement value.
The insurance policy must name the franchisee as the insured and Franchisor's Affiliate as an additional insured and loss payee. The policy must also include cross-liability endorsements and a clause requiring the insurer to provide Franchisor's Affiliate with at least 30 days' written notice of any material changes to the policy terms or cancellation. The franchisee is responsible for providing Franchisor's Affiliate with a certificate of insurance or other satisfactory evidence that the required coverage is in effect.
It is important to note that Franchisor's Affiliate is not obligated to verify the existence or compliance of the insurance policy. The franchisee must promptly notify Franchisor's Affiliate of any damage to or loss of the Pod. If the franchisee fails to obtain the required insurance, Franchisor's Affiliate has the option to either obtain the insurance themselves or declare the franchisee in default. If Franchisor's Affiliate obtains the insurance, the franchisee is responsible for promptly reimbursing Franchisor's Affiliate for all costs, including reasonable administrative costs.