What is the minimum coverage period, in months of rent, required for business interruption/extra expense coverage in Bft's property insurance?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Liability with limits not less than $500,000 each accident, $500,000 disease – each employee, and $500,000 disease – policy limit.
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- Property insurance written on a special causes of loss coverage form with limits not less than the current replacement cost of the Studio's business personal property (including furniture, fixtures and equipment) and leasehold improvements (tenant improvements). Such Property insurance shall include glass coverage with limits not less than $25,000, signage cov
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–36)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees must maintain property insurance that includes business interruption/extra expense coverage. This coverage must have limits not less than 12 months of rent.
This requirement ensures that if a Bft studio experiences an interruption in business due to property damage (e.g., fire, natural disaster), the insurance will cover the extra expenses and lost income for up to a year's worth of rent. This helps the franchisee to continue meeting their financial obligations while the studio is being repaired or rebuilt.
It is important for prospective franchisees to factor in the cost of this insurance coverage when assessing the overall investment required to open and operate a Bft franchise. They should also discuss with their insurance provider the specific events covered under the business interruption policy and any potential exclusions.