What happens if a Bft franchisee fails to maintain required insurance coverage?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 6 OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 7% of Gross Sales generated by your Studio over the relevant reporting period 1 | Payable weekly via electronic funds transfer (“EFT”) based on the Gross Sales of your Studio during the preceding business week | You will be required to start paying your Royalty once your Studio begins collecting revenue from operations. We may collect your Royalty on a different interval (for example, monthly). |
| Contributions to Brand Development Fund 2 | Currently, 2% of Gross Sales 1 | Payable weekly around the same time and in the same manner as the Royalty | Your contributions (the “Fund Contributions”) to the Brand Development Fund (the “Fund”) will begin when your Studio begins generating revenue from operations. We may, on notice to you, adjust the amount of your required Fund Contributions, subject to the Marketing Expenditure Cap. 3 |
| Regional or Local Advertising Co-Op | As the Co-Op determines (not currently charged) | As the Co-Op determines | We may establish regional cooperatives comprised of Studios that are within a given geographical area (each, a “Co-Op”). |
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, if a franchisee fails to maintain the required insurance coverage, Bft has the option to obtain the coverage for the franchisee. In this case, the franchisee is responsible for paying Bft the amount of the unpaid premium.
Item 8 of the Bft FDD specifies the minimum insurance requirements. The minimum limits for coverage under many policies will vary depending on several factors, including the size of the studio, and the number of classes offered at the studio.
This is a fairly standard clause in franchise agreements. It protects both the Bft brand and the franchisee from potential liabilities. Franchisees should ensure they understand the insurance requirements and maintain adequate coverage to avoid Bft securing insurance on their behalf and billing them for the premiums.