Can Fitstop terminate the franchise agreement if the franchisee fails to obtain and maintain the required insurance?

According to Fitstop's 2024 Franchise Disclosure Document, failure to obtain and maintain the required insurance constitutes a material breach of the franchise agreement, entitling Fitstop to terminate the agreement.

Fitstop requires franchisees to acquire and maintain minimum insurance policies throughout the entire term of the franchise. These policies must insure both the franchisee and Fitstop, including its officers, directors, and nominees, as additional insureds against any liability arising from the ownership, maintenance, or operation of the franchise business. Fitstop must receive a 30-day written notice of cancellation, modification, or termination of these policies. Franchisees must furnish original or duplicate copies of all insurance policies, certificates of insurance, or other acceptable proof of insurance to Fitstop, along with proof of payment, within 30 days of issuance.

If a franchisee fails to obtain and maintain the required insurance, Fitstop has the discretion to obtain the insurance themselves, and the franchisee will be responsible for paying the premium costs upon demand. Fitstop may also periodically increase the amount of coverage required or require different or additional coverage. Franchisees are also responsible for procuring and paying for all other insurance required by state or federal law. This requirement is typical in franchising, as franchisors need to protect their brand and avoid liability from franchisee operations.