What specific section of the Bft franchise agreement allows for immediate termination due to insurance coverage lapse?
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 maintain required insurance coverage can lead to immediate termination of the franchise agreement. Specifically, Item 23 states that the lapse of required insurance is grounds for immediate termination per Section 15.1 of the agreement. The franchisee is responsible for any losses, claims, or actions that arise after a lapse in or termination of insurance coverage and must protect Bft from any related harm.
Section 15.1 outlines the conditions under which Bft can terminate the franchise agreement for "good cause," including instances of immediate termination without an opportunity to cure the default. This section specifies several scenarios that constitute grounds for immediate termination, such as material misrepresentations in the application process, insolvency, bankruptcy, or abandonment of the studio.
In practical terms, this means a Bft franchisee must ensure continuous and adequate insurance coverage as mandated by the franchise agreement. Failure to do so not only leaves the franchisee vulnerable to potential liabilities but also provides Bft with the right to terminate the agreement immediately, resulting in the loss of the franchise. Franchisees should carefully review the insurance requirements and termination clauses to fully understand their obligations and the potential consequences of non-compliance.