Can the Bft franchise agreement be terminated for failure to maintain 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.
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 is grounds for immediate termination of the Franchise Agreement. The franchisee is also responsible for any losses, claims, or causes of action that arise after the lapse or termination of insurance coverage and must hold Bft harmless from such events.
Bft requires franchisees to secure insurance policies from a licensed insurance company in the state where the studio operates, with a minimum "A" Rating Classification as indicated in A.M. Best's Key Rating Guide. Bft retains the right to modify insurance requirements based on industry standards, market conditions, or landlord requirements, and franchisees must revise their coverage within 60 days of notice from Bft.
Bft also has the right to designate or require pre-approval of the insurance provider. Franchisees must provide certificates of coverage to Bft annually, and all insurance policies must waive subrogation rights and provide Bft with 30 days' notice before any cancellation or material change. If a franchisee fails to maintain the required insurance, Bft has the right, but not the obligation, to procure the insurance and charge the franchisee for the cost plus reasonable expenses.