What is the minimum amount of comprehensive automobile liability insurance required for a Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
usiness. Business interruption insurance for a minimum of twelve (12) months, in an amount necessary to satisfy Franchisee's obligations under this Agreement and the lease for the Franchised Business location.
- 15.1.5. Automobile Insurance. Prior to operation of any vehicle on behalf of the Franchised Business, Franchisee must obtain comprehensive automobile liability insurance in the amount of at least a combined single limit for bodily injury and property damage of One Million Dollars ($1,000,000), or greater if required by state law.
- 15.2. Evidence of Insurance. Franchisee shall deliver to, and maintain at all times with Franchisor, current Certificates of Insurance evidencing the existence and continuation of the required coverages. In addition, if requested by Franchisor, Franchisee shall deliver to Franchisor a copy of the insurance policy or policies required hereunder.
- 15.3. Failure to Procure. If, for any reason, Franchisee should fail to procure or maintain the insurance required by this Agreement as revised
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees must obtain comprehensive automobile liability insurance. Prior to operating any vehicle on behalf of the franchised business, the franchisee needs to secure insurance coverage of at least a combined single limit of $1,000,000 for bodily injury and property damage. However, if state law requires a higher amount, the franchisee must comply with the state's requirement.
This requirement ensures that Fly Fitness franchisees have adequate financial protection in case of accidents involving vehicles used for the business. It covers potential liabilities for bodily injury and property damage caused to third parties. Franchisees must provide current Certificates of Insurance to Fly Fitness as evidence of continuous coverage.
Fly Fitness also retains the right to increase the minimum insurance requirements or add new types of insurance coverage if deemed necessary. Franchisees are obligated to comply with these changes within thirty days by submitting proof of the updated coverage. Failure to maintain the required insurance allows Fly Fitness to procure the insurance on behalf of the franchisee and charge the franchisee for the cost, along with a 10% administrative fee.
Furthermore, all insurance policies must name Fly Fitness and its affiliates as additional insureds. This protects Fly Fitness from potential liabilities arising from the franchisee's operations. The franchisee is also required to indemnify Fly Fitness from any claims related to the operation of the Fly Fitness franchise.