Who must be named as additional insured parties on the Fly Fitness franchisee's insurance policies?

According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to secure specific insurance coverage and name certain parties as additional insureds. Fly Fitness mandates that franchisees' insurance policies must name Fly Fitness and its respective officers, directors, partners, agents, and employees as additional insured parties. This requirement ensures that Fly Fitness is protected against potential liabilities arising from the franchisee's business operations.

The insurance policies that Fly Fitness franchisees must obtain include 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, 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. These policies must be written by a responsible carrier acceptable to Fly Fitness.

This requirement is a standard practice in franchising, where franchisors seek to mitigate risks associated with their franchisees' operations. By being named as an additional insured, Fly Fitness can directly benefit from the franchisee's insurance coverage in the event of a claim. Prospective franchisees should carefully review the insurance requirements and ensure they can obtain the necessary coverage at a reasonable cost. They should also confirm that the insurance carriers they choose are acceptable to Fly Fitness to avoid any compliance issues.