Who is responsible for the cost and expense of the insurance policies for a Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
s, advertising injury, environmental damage and abuse and molestation coverage in the amount of at least One Million Dollars ($1,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate;
- 15.1.2. Employment. Worker's compensation coverage in the limits required by state law, as well as such other insurance as may be required by statute or rule of the state in which the Franchised Business is located and operated;
- 15.1.3. Property. Fire, vandalism, and extended coverage insurance for property damage with primary and excess limits of not less than Fifty Thousand Dollars ($50,000) or the full replacement value of the leasehold improvements, equipment, furniture, fixtures, vehicles, and inventory, whichever is greater.
- 15.1.4. Business. 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 limi
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchisee is responsible for the cost and expense of the insurance policies for their Fly Fitness franchise.
Fly Fitness requires franchisees to maintain several types of insurance coverage. These include worker's compensation coverage in the limits required by state law, fire, vandalism, and extended coverage insurance for property damage with primary and excess limits of not less than $50,000 or the full replacement value, business interruption insurance for a minimum of 12 months, and comprehensive automobile liability insurance in the amount of at least $1,000,000, or greater if required by state law.
Fly Fitness also reserves the right to raise the required minimum requirements for any type of insurance or add additional types of insurance requirements as Fly Fitness deems reasonably prudent to require. Within thirty days of any such required new limits or types of coverage, the franchisee must submit proof to Fly Fitness of the franchisee's coverage pursuant to Fly Fitness's requirements. All required insurance policies must name Fly Fitness and their affiliates and their members, officers, agents, and employees as additional insureds as their interests may appear.
This means a prospective Fly Fitness franchisee must factor in the ongoing cost of these insurance policies as part of their operating expenses. Furthermore, they need to be prepared to adjust their coverage and potentially incur additional costs if Fly Fitness increases the minimum insurance requirements during the term of their franchise agreement.