Can Bft designate or require pre-approval of the insurance provider for franchisees?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor reserves the right to designate, or require pre-approval of, the provider of any insurance required in connection with the Studio.
- E.
Franchisee's obligation to obtain and maintain insurance shall not be limited by reason of any insurance that may be maintained by Franchisor nor relieve Franchisee of liability under the indemnity provisions set forth in this Agreement.
At Franchisor's designation, Franchisor, as well as its parents, affiliates, and subsidiaries, shall be included as additional insureds on the Studio's insurance policies, including without limitation, the Studio's Commercial General Liability and any Umbrella Excess Liability insurance policies.
All insurance policies must waive any subrogation rights or other rights to assert a claim back against Franchisor and shall contain a clause requiring notice to Franchisor thirty (30) days in advance of any cancellation or material change or cancellation to any such policy.
Franchisee shall give Franchisor certificates of coverage at least annually.
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.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft does reserve the right to designate or require pre-approval of the insurance provider that franchisees must use in connection with their studio. This means that as a franchisee, you might be required to obtain your insurance from a specific provider or one that Bft has already approved.
Bft also has the right to modify insurance requirements, including policy limits, deductibles, coverage scope, or carrier ratings, based on industry standards, market conditions, or landlord requirements. Franchisees must revise their coverage within 60 days of receiving notice from Bft about these changes.
All insurance policies must be written by a company licensed in the state where the Bft studio operates and have an 'A' Rating Classification as indicated in A.M. Best's Key Rating Guide. Additionally, Bft, including its parents, affiliates, and subsidiaries, can be included as additional insureds on the studio's insurance policies, such as Commercial General Liability and Umbrella Excess Liability insurance. Franchisees must provide Bft with certificates of coverage annually, and failure to maintain the required insurance can lead to immediate termination of the Franchise Agreement.