What happens if a Fitstop franchisee fails to obtain the required insurance coverage?
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.
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 necessary insurance coverage as 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 cost of the insurance will be deducted from any payments made to the franchisee.
Fitstop can also relieve itself of the responsibility of purchasing and administering the insurance coverage by providing the franchisee with 10 calendar days' written notice. This means that the franchisee would then be solely responsible for obtaining the required insurance coverage within that 10-day period.
It is important for prospective Fitstop franchisees to understand the insurance requirements outlined in the franchise agreement and to ensure they obtain the necessary coverage in a timely manner. Failure to do so could result in Fitstop purchasing the insurance and deducting the costs from payments to the franchisee, or potentially lead to a breach of the franchise agreement if the franchisee fails to secure coverage after receiving notice from Fitstop.