For how many months must a Fly Fitness franchisee maintain business interruption insurance?

According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to maintain business interruption insurance for a minimum of twelve months. This insurance coverage should be in an amount necessary to satisfy the franchisee's obligations under the Franchise Agreement and the lease for the Fly Fitness location.

This requirement ensures that Fly Fitness franchisees have a financial safety net in case of unforeseen circumstances that disrupt their business operations, such as property damage or other events that force them to temporarily close. The insurance coverage helps franchisees meet their financial obligations, including lease payments and other contractual commitments, even when their business is not fully operational.

The franchisor also has the right, but not the obligation, to procure the insurance if the franchisee fails to do so. If Fly Fitness exercises this right, the franchisee will be charged for the cost of the insurance, along with a 10% administrative fee and all attorney's fees incurred by Fly Fitness. This underscores the importance of maintaining continuous coverage to avoid additional expenses and potential disruptions to the business.

Prospective Fly Fitness franchisees should factor in the cost of this business interruption insurance when assessing the overall financial investment required to start and operate the franchise. They should also discuss with insurance providers to determine the appropriate coverage amount needed to satisfy their specific obligations under the Franchise Agreement and lease terms.