How much written notice must Fitstop give a franchisee to relieve itself of obligations regarding 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 required insurance coverage, Fitstop has the option, but not the obligation, to purchase the insurance and deduct the costs from payments to the franchisee. Fitstop can relieve itself of all obligations related to purchasing and managing this insurance coverage by providing the franchisee with 10 calendar days of written notice.
This means that if a Fitstop franchisee fails to maintain the insurance required by federal, state, and local law, as well as the franchise agreement, Fitstop can step in to secure the necessary coverage. However, Fitstop can then transfer the responsibility back to the franchisee with just 10 days' notice.
This provision protects Fitstop from long-term involvement in managing franchisee insurance while ensuring the franchise location remains compliant. It also places the onus on the franchisee to maintain proper insurance coverage, as failure to do so could result in Fitstop purchasing the insurance and deducting the costs, or Fitstop relieving itself of the obligation with a short notice period.