What happens if a Fitstop franchisee fails to obtain the required insurance?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3 In the event you shall fail to obtain such insurance with such coverages as the federal, state, and local law as well as this Agreement requires, we may, but are not obligated to, purchase said insurance, deducting these amounts from any payments made to you. We may relieve ourself of all obligations with respect to the purchase and administration of such insurance coverage by giving 10 calendar days written notice to you.
- 8.4 The various limits of the insurance that federal, state, and local law as well as this Agreement requires may be increased or circumstances may dictate that you add new types of coverage.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee fails to obtain the insurance coverage required by federal, state, and local law, as well as the Franchise Agreement, Fitstop has the option, but not the obligation, to purchase the insurance on behalf of the franchisee. If Fitstop chooses to do so, the premiums will be deducted from any payments owed to the franchisee.
Fitstop can also relieve itself of the responsibility of purchasing and managing the insurance coverage by providing the franchisee with 10 calendar days' written notice. This allows Fitstop to avoid the administrative burden and financial risk associated with ensuring the franchisee's compliance with insurance requirements.
The Franchise Agreement also states that the required insurance limits may be increased, or new types of coverage may be added, based on changes in federal, state, and local laws or other circumstances. It is the franchisee's responsibility to stay informed about these changes and ensure their insurance coverage remains compliant. Franchisees must also provide Fitstop with evidence of premium payments and copies of the insurance policies at least 30 calendar days before opening their business or 30 calendar days before the expiration date of an existing policy. The insurance policies must be in effect before the franchisee begins servicing members.