Under the Aira Fitness lease, does loss or damage to the Pod relieve the franchisee of their obligations?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Risk of Loss. From the date the Supplier ships the Pod to Franchisee or the date Franchisor's Affiliate confirms Franchisee's purchase order or contract to Supplier, whichever occurs first, Franchisee hereby assumes and shall bear the entire risk of loss for theft, damage, destruction or other injury to the Pod from any and every cause whatsoever. NO SUCH LOSS OR DAMAGE SHALL IMPAIR ANY OBLIGATION OF FRANCHISEE UNDER THIS LEASE WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT. In the event of damage or loss to the Pod (or any part thereof) and irrespective of payment from any insurances coverage maintained by Franchisee, but applying full credit therefor, Franchisee shall at the option of Franchisor's Affiliate, (a) place the Pod in good repair, condition and working order; or (b) replace the Pod (or any part thereof) with like equipment in good repair, condition and working order and transfer clear title to such replacement equipment to Franchisor's Affiliate, whereupon such replacement equipment shall be deemed the Pod for all purposes; or (c) pay to Franchisor's Affiliate, not as a penalty, but herein liquidated for all purposes, an amount equal to the sum of (A) any accrued and unpaid rent as of the
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to the 2025 Aira Fitness Franchise Disclosure Document, loss or damage to the Pod does not relieve the franchisee of their obligations under the lease. The franchisee assumes the entire risk of loss for theft, damage, destruction, or other injury to the Pod from the date the Supplier ships it or from when the Franchisor's Affiliate confirms the purchase order, whichever occurs first. This responsibility applies regardless of the cause of the loss or damage.
Specifically, the lease remains in full force and effect despite any loss or damage to the Pod. In the event of damage or loss, the franchisee is obligated to either repair the Pod, replace it with like equipment, or pay the Franchisor's Affiliate an amount equal to any accrued and unpaid rent, irrespective of any insurance coverage payments. The choice of action (repair, replace, or pay) is at the discretion of the Franchisor's Affiliate.
This clause highlights a significant financial responsibility for Aira Fitness franchisees. They are essentially responsible for the Pod's integrity throughout the lease term, regardless of unforeseen circumstances. Franchisees must maintain adequate insurance coverage to mitigate this risk, as they are responsible for the replacement value of the Pod. Failure to obtain the required insurance allows the Franchisor's Affiliate to obtain it and be promptly reimbursed by the franchisee, adding another layer of potential cost.
This type of clause is not uncommon in equipment leasing agreements within the franchise industry, as it ensures the lessor (Franchisor's Affiliate) is protected against losses. However, prospective Aira Fitness franchisees should carefully consider the implications of this clause and ensure they have sufficient insurance coverage and financial resources to meet these obligations in case of damage or loss to the Pod.