Who bears the expense of acquiring and maintaining the required insurance policies for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
nimum Requirements)
You must acquire and maintain, at your expense and by advance payment(s), during the entire term of the franchise the following minimum insurance policies, which minimums may be adjusted periodically in our Manuals or otherwise by prior advance writing:
| Type of Insurance | Limits |
|---|---|
| Employee Dishonesty /"3-D" | $300,000 (per Occurrence) |
| Comprehensive Crime Insurance | |
| Comprehensive General Liability | $2,000,000 (General Aggregate) $2,000,000 (Products/Completed Operations) | |---|---| | Comprehensive General Liability | $1,000,000 | | Business Automobile Liability, including | $1,000,000 (per Occurrence) | | owned, hired and non-owned automobile | | | insurance | | | Excess or Umbrella Insurance | $5,000,000 (per Occurrence & Aggregate) | | Workers Compensation Insurance | Statutory Limits | | Employment Practices Liability Insurance | $1,000,000/$1,000,000/$1,000,000 | These policies will insure both you and us and our officers and directors and nominees as additional insureds against any liability which may accrue by reason of your ownership, maintenance or operation of the franchise business wherever it may be located. These policies will stipulate that we will receive a 30-day written notice of cancellation, modification or termination. Original or duplicate copies of all insurance policies, certificates of insurance, or other proof of insurance acceptable to us must be furnished to us together with proof of payment within 30 days of issuance. These insurance coverage requirements are only minimums.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the franchisee is responsible for acquiring and maintaining the required insurance policies at their own expense. These policies must be maintained during the entire term of the franchise. The minimum insurance requirements may be adjusted periodically by Fitstop in its manuals or in writing.
The insurance policies must cover both the franchisee and Fitstop, including its officers, directors, and nominees, as additional insureds against any liability arising from the ownership, maintenance, or operation of the franchise business. Fitstop must receive a 30-day written notice of cancellation, modification, or termination of any policy. Franchisees must provide Fitstop with copies or certificates of insurance and proof of payment within 30 days of issuance.
It is important to note that the insurance coverage requirements specified by Fitstop are minimums, and franchisees should independently determine if increased amounts or additional types of insurance are necessary. Failure to obtain and maintain the required insurance constitutes a material breach of the franchise agreement, potentially leading to termination. Fitstop has the option to obtain the insurance if the franchisee fails to do so, with the franchisee responsible for paying the premium costs upon demand. Franchisees are also responsible for procuring and paying for all other insurance required by state or federal law. The FDD provides a table of the minimum insurance coverage required, including Comprehensive General Liability ($2,000,000 General Aggregate, $2,000,000 Products/Completed Operations, and $1,000,000), Business Automobile Liability ($1,000,000 per Occurrence), Excess or Umbrella Insurance ($5,000,000 per Occurrence & Aggregate), Workers Compensation Insurance (Statutory Limits), and Employment Practices Liability Insurance ($1,000,000/$1,000,000/$1,000,000).
Prospective franchisees should carefully review the required insurance coverage and associated costs to ensure they can meet these obligations. It would be prudent to consult with an insurance professional to assess their specific needs and risks and to determine if additional coverage is appropriate beyond the minimums required by Fitstop.