What happens if a Fly Fitness franchisee fails to procure or maintain the required insurance?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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, while the document outlines the franchisee's responsibilities regarding insurance, it does not explicitly state the consequences of failing to procure or maintain the required insurance coverage.
However, the FDD does state that the franchisee is responsible for indemnifying Fly Fitness from claims related to the operation of the franchise. This suggests that a failure to maintain adequate insurance could leave the franchisee personally liable for any claims or losses that would otherwise be covered by insurance. The 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, or inquiry.
To fully understand the ramifications of failing to maintain insurance, a prospective Fly Fitness franchisee should ask the franchisor for specific details regarding the potential penalties or actions Fly Fitness could take. This information is crucial for assessing the risks associated with the franchise and ensuring compliance with the franchise agreement.