Does the automobile liability insurance requirement for Bft apply if no vehicles are used in the operation of the franchise?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Automobile Liability insurance covering liability arising out of Franchisee's use, operation or maintenance of any auto (including owned, hired, and non-owned autos, trucks or other vehicles) in connection with its ownership and operation of the franchise, with limits not less than the minimum compulsory requirements in Franchisee's state. This requirement only applies to the extent that owned, leased or hired/rented vehicles are used in the operation of the franchise.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the automobile liability insurance requirement only applies if vehicles are used in the operation of the franchise. Specifically, this insurance covers liability arising from the franchisee's use, operation, or maintenance of any vehicle, including owned, hired, and non-owned vehicles, in connection with the franchise.
In practical terms, if a Bft franchisee does not use any vehicles for their business operations, they are not required to carry automobile liability insurance. This could be the case if the studio is located in an area where clients and staff primarily use public transportation or walk, and the franchisee does not offer delivery or off-site services that would necessitate vehicle use.
However, it is important for prospective franchisees to carefully assess their business operations and local regulations to ensure compliance. If there is any possibility that vehicles might be used, even occasionally, it would be prudent to maintain the required insurance coverage. Franchisees should also stay informed about any changes to insurance requirements, as Bft reserves the right to modify these based on industry standards and market conditions.