Does Fitstop derive revenue as a result of a franchisee's purchase of insurance?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
If you fail to obtain insurance and keep the same in full force and effect, we may obtain this insurance at our discretion, and you will pay us the premium costs upon our demand. Failure to obtain and maintain the required insurance constitutes a material breach of the franchise agreement entitling us to terminate the agreement. You must also procure and pay for all other insurance required by state or federal law. We may periodically increase the amount of coverage required and/or require different or additional coverage. We do not derive revenue as a result of your purchase of insurance.
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, Fitstop does not derive revenue from a franchisee's purchase of insurance. However, franchisees are required to maintain minimum insurance policies, which may be adjusted periodically by Fitstop.
The required insurance policies must insure both the franchisee and Fitstop, including its officers, directors, and nominees, against any liability related to the ownership, maintenance, or operation of the franchise business. These policies must also stipulate that Fitstop receives a 30-day written notice of cancellation, modification, or termination. Franchisees must provide Fitstop with copies of all insurance policies, certificates, or other acceptable proof of insurance, along with proof of payment, within 30 days of issuance.
If a franchisee fails to obtain and maintain the required insurance, Fitstop has the right to obtain the insurance and charge the franchisee for the premium costs. Failure to maintain the required insurance constitutes a material breach of the franchise agreement, potentially leading to termination. Franchisees are also responsible for procuring and paying for all other insurance required by state or federal law. Fitstop may periodically increase the required coverage amounts or require different or additional coverage.