What are the consequences if a Bft franchisee fails to maintain the required insurance coverage?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Failure to obtain or the lapse of any of the required insurance coverage shall be grounds for the immediate termination of this Agreement pursuant to Section 15.1, and Franchisee agrees that any losses, claims or causes of action arising after the lapse of or termination of insurance coverage will be the sole responsibility of Franchisee and that Franchisee will hold Franchisor harmless from all such losses, claims and/or causes of action.
In addition, but not to the exclusion of the foregoing remedy, if Franchisee fails to procure or maintain the required insurance, Franchisor shall have the right and authority, but not the obligation, to procure immediately the insurance and Franchisee shall reimburse Franchisor for the cost of the insurance plus reasonable expenses immediately upon written notice.
Franchisee shall give Franchisor certificates of coverage at least annually.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, failure to obtain or maintain the required insurance coverage can lead to significant repercussions for the franchisee. Specifically, it constitutes grounds for immediate termination of the Franchise Agreement, as outlined in Section 15.1. This means Bft has the right to terminate the franchise agreement immediately if the franchisee does not have the required insurance.
Furthermore, the franchisee is solely responsible for any losses, claims, or causes of action that arise after the insurance coverage lapses or is terminated. The franchisee must also hold Bft harmless from all such losses, claims, and/or causes of action. This means that if a customer or employee is injured at the Bft studio and the franchisee does not have the required insurance, the franchisee is responsible for all resulting medical bills, legal fees, and other costs.
In addition to the above consequences, Bft has the right, but not the obligation, to procure the required insurance immediately if the franchisee fails to do so. In such cases, the franchisee must reimburse Bft for the cost of the insurance plus any reasonable expenses incurred by Bft. This ensures that Bft can protect its brand and reputation even if a franchisee is not compliant with the insurance requirements. Franchisees must provide certificates of coverage to Bft at least annually.