For Aira Fitness, what risks of loss must the franchisee's insurance cover?
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)
According to Aira Fitness's 2025 Franchise Disclosure Document, franchisees must maintain insurance coverage throughout the term of the agreement to cover liabilities related to the development or operation of the Aira Fitness business. This insurance must include 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.
Additionally, franchisees must secure business interruption insurance covering a minimum of 12 months of lost income, written on an actual loss sustained basis, including coverage for monthly fees, with Aira Fitness named as a loss payee regarding those fees. Comprehensive general liability insurance is required 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. Automobile liability insurance, including owned, hired, and non-owned vehicle coverage, must have a minimum combined single limit of at least $1,000,000 per claim.
Further insurance requirements include 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 insurance with minimum limits of at least $25,000 per occurrence, medical expense coverage of at least $1,000 per accident, and crime insurance (employee dishonesty, theft, and robbery) with minimum limits of at least $10,000 per occurrence are also mandated. Lastly, franchisees need employment practices liability insurance with minimum limits of at least $100,000 per occurrence, inclusive of both first and third-party coverage. Aira Fitness Franchising LLC and any entity they designate must be named as additional insureds on all liability policies, and each policy must contain a waiver of subrogation in favor of the additional insureds.
The FDD states that Aira Fitness may modify the required minimum insurance limits from time to time by written notice to reflect changes in relevant circumstances, industry standards and experiences in the Aira Fitness system. If a franchisee fails to maintain the required insurance coverage, Aira Fitness has the right, but not the obligation, to procure insurance coverage and charge the franchisee for the costs incurred. The FDD also states that the minimum insurance requirements do not constitute advice or a representation that such coverages are necessary or adequate to protect the franchisee from losses in connection with the Aira Fitness Business.