What is the minimum property insurance coverage a Fly Fitness franchisee must maintain?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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Before you open for business, you must purchase and maintain the minimum insurance coverage that we specify. This includes commercial general liability insurance, including coverage for professional liability and sexual abuse of at least $1 million per occurrence and $3 million aggregate; worker's compensation coverage in the limits required by the state in which the Franchised Business is located; business interruption insurance; property insurance for the full replacement value of furniture, fixtures, equipment, vehicles, inventory, and leasehold improvements or $50,000, whichever is greater; and comprehensive automobile insurance of $1 million for any vehicle operated on behalf of the Franchised Business. Each policy must be written by a responsible carrier or carriers acceptable to us and must name us and our respective officers, directors, partners, agents, and employees as additional insured parties, as their interests may appear. We reserve the right to require additional types of insurance and coverage as prov
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–20)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to maintain property insurance for the full replacement value of furniture, fixtures, equipment, vehicles, inventory, and leasehold improvements. However, the minimum coverage must be at least $50,000, whichever is greater. This insurance protects the franchisee's physical assets from damage or loss due to events like fire, theft, or natural disasters.
This requirement ensures that Fly Fitness franchisees have adequate financial protection to recover from unexpected events that could disrupt their business operations. Maintaining sufficient property insurance is a standard practice in franchising, as it safeguards both the franchisee's investment and the franchisor's brand reputation by ensuring consistent service and appearance across all locations.
The franchisee is responsible for securing this insurance coverage before opening their Fly Fitness location. The policy must be written by a carrier acceptable to Fly Fitness and must name Fly Fitness and its officers, directors, partners, agents, and employees as additional insured parties. Fly Fitness also reserves the right to require additional types of insurance and coverage as deemed necessary.