What insurance coverages are Fitstop franchisees required to acquire and maintain?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
yalty-free worldwide license to use and sublicense others to use such Improvements.
Section 8: Insurance
8.1 You shall, prior to operating the Franchise, acquire and maintain in effect such insurance with such coverages as the federal, state, and local law as well as this Agreement may require, and in any event, you shall acquire and maintain in effect not less than the following coverages in the following minimum amounts set forth below, as we may update, supplement and/or otherwise modify from time to time via the Manuals or other prior written notice:
| Topic | Approximate Pages of Content (including Digital) |
|---|---|
| Brand Welcome | 32 |
| Securing an Approved Premises | 75 |
| Buildout/Development of Franchised Business | 410 |
| Financial Fitness | 34 |
| Pathway to Opening | 153 |
| Sales Leads and Client Retention | 31 |
| Product Fundamental | 48 |
| Operations | 111 |
| Technology Overview | 103 |
| WHS | 38 |
| Marketing Fundamentals | 101 |
| Campaign Toolkits | 200 |
| Performance Program | 95 |
| Total | 1,430 |
- 8.2 You shall comply with the following requirements for all insurance policies that you acquire and maintain:
- 8.2.1 You shall name us and any party we designate as additional insureds, as their interests may appear in this Agreement. The additional insured status of us and any party we designate shall be primary and there shall be no requirement for us or any party we designate to financially contribute to or be liable for the insurance coverage. For purposes of Comprehensive General Liability and Excess or Umbrella Insurance, the status of us and any party we designate as an additional insured shall apply to both ongoing and completed operations coverage.
- 8.2.2 You shall provide evidence of payment of premiums of the aforementioned insurance policies and duplicate copies of policies to us no less than 30 calendar days prior to the date that you open for business and/or 30 calendar days prior to the expiration date of an existing policy of insurance.
- 8.2.3 Your insurance policies shall be in effect on or prior to the date that you begin servicing members.
- 8.2.4 You shall cause the insurer to include as a provision in all insurance policies that the insurer must give written notice to us no less than 30 calendar days prior to any cancellations of or material changes to the policy.
- 8.2.5 You shall cause the insurer to include as a provision in all insurance policies a waiver of subrogation favoring us, our officers, and our directors.
- 8.2.6 You shall obtain all insurance policies from a reputable insurance company licensed to do business in the state in which your Franchise is located and having a Financial Size Category equal to or greater than IX and Policyholders Rating of "A+" or "A", as assigned by Alfred M. Best and Company, Inc., unless the we approve otherwise.
- 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.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees must acquire and maintain insurance coverage as required by federal, state, and local laws, as well as the Franchise Agreement. The specific types and minimum amounts of coverage can be updated or modified by Fitstop through the manuals or other written notice.
Fitstop franchisees must adhere to specific requirements for all insurance policies. Fitstop and any designated parties must be named as additional insureds, with their status as additional insureds being primary, without any requirement for them to contribute financially to the coverage. This additional insured status applies to both ongoing and completed operations coverage for Comprehensive General Liability and Excess or Umbrella Insurance.
Franchisees must provide evidence of premium payments and duplicate copies of policies to Fitstop no less than 30 calendar days before opening for business or 30 calendar days before the expiration of an existing policy. Insurance policies must be in effect before servicing members. The insurer must provide written notice to Fitstop at least 30 calendar days before any cancellations or material changes to the policy and include a waiver of subrogation favoring Fitstop, its officers, and directors.
Insurance policies must be obtained from a reputable insurance company licensed in the state where the franchise is located, with a Financial Size Category equal to or greater than IX and a Policyholders Rating of "A+" or "A", as assigned by Alfred M. Best and Company, Inc., unless Fitstop approves otherwise. If a franchisee fails to obtain the required insurance, Fitstop has the option, but not the obligation, to purchase the insurance and deduct the costs from any payments made to the franchisee, or relieve themselves of the obligation by giving 10 calendar days written notice. The required insurance limits may be increased, or new types of coverage may be added based on changes in federal, state, and local laws, as well as the Franchise Agreement.