What is the minimum business interruption insurance coverage period required by Fly To Fit?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
cific Obligations
The following are our current specific obligations for purchases and leases:
- A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign our form of Rider to Lease Agreement (attached to this disclosure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–21)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, franchisees must maintain business interruption insurance covering at least 12 months of income. This requirement is part of the broader insurance obligations outlined in the Franchise Agreement and Brand Standards Manual.
This means that a Fly To Fit franchisee needs to secure an insurance policy that will cover their income for a minimum of one year if the business is temporarily shut down due to unforeseen circumstances like fire, vandalism, or other covered events. The purpose of this insurance is to help the franchisee meet ongoing financial obligations, such as rent, salaries, and other operating expenses, during a period when the business is not generating revenue.
In addition to business interruption insurance, Fly To Fit also requires franchisees to obtain other types of coverage, including property insurance, commercial general liability insurance ($1,000,000 single limit per occurrence and $2,000,000 aggregate limit), business automobile liability insurance ($1,000,000), and workers' compensation coverage. Franchisees must also ensure that Fly To Fit and its affiliates are listed as additional insureds on their policies (excluding Workers Compensation), that the policies include a waiver of subrogation, and that Fly To Fit receives 30 days' prior written notice of cancellation. These stipulations are fairly standard in franchising to protect the franchisor's brand and limit liability.
Prospective franchisees should carefully review the insurance requirements with a qualified insurance broker to ensure they obtain adequate coverage that meets Fly To Fit's standards and protects their investment. Understanding the full scope of required insurance and its associated costs is a crucial part of assessing the financial viability of a Fly To Fit franchise.