What is the Fly Fitness franchisee's obligation if the premises are damaged or destroyed by a casualty?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.4.
Increase in Coverage.The levels and types of insurance stated herein are minimum requirements.
Franchisor reserves the right to raise the required minimum requirements for any type of insurance or add additional types of insurance requirements as Franchisor deems reasonably prudent to require.
Within thirty (30) days of any such required new limits or types of coverage, Franchisee must submit proof to Franchisor of Franchisee's coverage pursuant to Franchisor's requirements.
- 15.5 Additional Insured.
All required insurance policies shall name Franchisor and their affiliates and their members, officers, agents, and employees as additional insureds as their interests may appear.
All public liability policies shall contain a provision that the additional insureds, although named as insureds, shall nevertheless be entitled to recover under such policies on any loss caused by Franchisee or Franchisee's servants, agents, or employees.
- 15.6 Indemnification.
TO THE FULLEST EXTENT PERMITTED BY LAW, FRANCHISEE AGREES TO EXONERATE AND INDEMNIFY AND HOLD HARMLESS FLY FITNESS FRANCHISE, L.L.C., FLY HOLDINGS, LLC, LICENSOR, AND ANY OF THESE COMPANIES' PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE "FLY FITNESS INDEMNITEES"), FROM ALL CLAIMS BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO THE OPERATION, CONDITION, OR ANY PART OF FRANCHISEE'S FLY FITNESS FRANCHISE, THE FRANCHISED BUSINESS, THE PRODUCTS, THE PREMISES, OR ANY ASPECT OF THE REAL ESTATE CONNECTED TO FRANCHISEE'S FRANCHISED BUSINESS, WHETHER CAUSED BY FRANCHISEE, FRANCHISEE'S AGENTS OR EMPLOYEES, OR ARISING FROM FRANCHISEE'S ADVERTISING OR BUSINESS PRACTICES.
FRANCHISEE AGREES TO PAY FOR ALL THE FLY FITNESS INDEMNITEES' LOSSES, EXPENSES (INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES) OR CONCURRENT OR CONTRIBUTING LIABILITY INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, INQUIRY (REGARDLESS OF WHETHER THE SAME IS REDUCED TO JUDGMENT OR DETERMINATION), OR ANY SETTLEMENT THEREOF FOR THE INDEMNIFICATION GRANTED BY FRANCHISEE HEREUNDER.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the franchisee is responsible for maintaining insurance coverage. While the document outlines general insurance requirements and indemnification responsibilities, it does not explicitly detail the franchisee's specific obligations in the event the premises are damaged or destroyed by a casualty.
However, the FDD does state that the franchisee must maintain certain minimum levels and types of insurance, and Fly Fitness retains the right to increase these requirements. Additionally, all insurance policies must name Fly Fitness and its affiliates as additional insureds, allowing them to recover losses caused by the franchisee or their agents. The franchisee also agrees to indemnify Fly Fitness from claims related to the operation, condition, or any part of the franchisee's Fly Fitness franchise, including the premises.
Because the FDD does not specifically address casualty events, prospective franchisees should seek clarification from Fly Fitness regarding the specific insurance coverages required to protect against property damage, business interruption, and other potential losses resulting from casualties such as fire, natural disasters, or other unforeseen events. Understanding these obligations is crucial for mitigating financial risks and ensuring business continuity.
In summary, while the FDD emphasizes the franchisee's general responsibility for insurance and indemnification, it lacks specific details on obligations related to casualty damage. A prospective franchisee should directly ask Fly Fitness for more information about required insurance coverage and procedures in the event of property damage or destruction.