What are the insurance requirements for a C3 Wellness Spa franchise?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
commencement of our initial training program. Insurance coverage must be at least as comprehensive as the minimum requirements set forth in
the chart below and in the Franchise Agreement (Franchise Agreement, Article 8). You must consult your carrier representative to determine the level of coverage necessary for the Franchised Business. Higher exposures may require higher limits.
Insurance Requirements
- (a) Coverage against direct physical loss or damage to real and personal property, including improvements and betterments, for all-risk perils, including a $100,000 fire liability limit, flood and earthquake, if the relevant property is situated in a flood or earthquake zone, equal to at least 100% of your Spa Location Franchisee's full insurable value;
- (b) Comprehensive general liability insurance, written on an occurrence basis, extended to include contractual liability, products liability and completed operations of at least $2,000,000 per occurrence, and personal and advertising injury, with a combined bodily injury and property damage limit of at least $2,000,000 per occurrence and $6,000,000 in the aggregate;
- (c) Statutory workers' compensation insurance and employers' liability insurance as required by the law of the state in which your Spa Location Franchise is located, including statutory workers' compensation limits and employers' liability limits of at least $1,000,000;
- (d) Business interruption insurance equal to 12 months of your net income and continuing expenses including Royalty Fees;
- (e) Commercial umbrella liability insurance with total liability limit of at least $1,000,000;
- (f) Cyber insurance in the amount of at least $1,000,000 protecting against first party and third party claims;
- (g) Employment practices liability insurance with a limit of at least $2,000,000 including actions of a third party and a minimum limit of $100,000 for wage and hour disputes;
- (h) Professional liability malpractice insurance for all medical providers with a limit of at least $1,000,000 per claim and $3,000,000 annual aggregate for all medical providers; and
- (i) All other insurance that we require in the Manual or that is required by law or by the lease or sublease for your Spa Location Franchise.
Purchase Agreements and Cooperatives
We may, in our discretion, negotiate purchase agreements, including price terms, with designated suppliers for source restricted goods and services on behalf of the System. We may establish preferred vendor programs with suppliers on behalf of some or all of the Spa Location Franchises under the System and, in doing so, we may limit the number of approved vendors and/or suppliers that you may purchase from and we may designate one vendor as your sole supplier. Presently, there are no purchase or supply agreements in effect for source restricted products or services and there are no purchasing or distribution cooperatives that you must join. You will not receive any material benefits for using our designated or approved suppliers.
Our Right to Receive Compensation and Our Revenue from Source Restricted Purchases
We and/or our affiliates may receive rebates, payments and other material benefits from suppliers based on your purchases and we reserve the right to institute and expand rebate programs in the future.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, franchisees must maintain several types of insurance coverage. These policies must be written by a responsible carrier acceptable to C3 Wellness Spa, and with the exception of workers' compensation, must name C3 Wellness Spa and its related parties as additional insureds. The insurance carrier must provide C3 Wellness Spa with at least 30 days' prior written notice of any material alteration or cancellation of the policy. Franchisees must furnish a certificate of insurance to C3 Wellness Spa either 90 days after the Franchise Agreement's effective date or before the start of initial training, whichever comes first. Franchisees should consult with their insurance carrier to determine the necessary coverage levels for their specific business, as higher exposures may require higher limits.
The required insurance coverage includes: coverage against direct physical loss or damage to real and personal property equal to at least 100% of the Spa Location Franchisee's full insurable value, including a $100,000 fire liability limit, flood and earthquake coverage if the property is in a relevant zone; comprehensive general liability insurance of at least $2,000,000 per occurrence, and personal and advertising injury, with a combined bodily injury and property damage limit of at least $2,000,000 per occurrence and $6,000,000 in the aggregate; statutory workers' compensation insurance and employers' liability insurance with employers' liability limits of at least $1,000,000; business interruption insurance equal to 12 months of net income and continuing expenses including Royalty Fees; commercial umbrella liability insurance with a total liability limit of at least $1,000,000; cyber insurance in the amount of at least $1,000,000 protecting against first party and third party claims; employment practices liability insurance with a limit of at least $2,000,000 including actions of a third party and a minimum limit of $100,000 for wage and hour disputes; and professional liability malpractice insurance for all medical providers with a limit of at least $1,000,000 per claim and $3,000,000 annual aggregate for all medical providers.
Additionally, franchisees must carry any other insurance that C3 Wellness Spa requires in the Manual or that is required by law or by the lease or sublease for their Spa Location Franchise. These insurance requirements are subject to change as specified in the Manuals. Franchisees are obligated to obtain the insurance coverage that C3 Wellness Spa requires, as disclosed in the Manuals and as modified by C3 Wellness Spa from time to time.