How much notice of cancellation must Fly To Fit receive from the franchisee's insurance company?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 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. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notic
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, Fly To Fit franchisees must ensure that their insurance policies stipulate that Fly To Fit receives 30 days' prior written notice of cancellation. This requirement applies to all policies except Workers Compensation.
This means that if a franchisee's insurance company decides to cancel their policy for any reason, Fly To Fit must be notified in writing at least 30 days in advance. This allows Fly To Fit time to ensure that the franchisee obtains replacement coverage, protecting both the franchisee and Fly To Fit from potential liability and financial loss.
Requiring advance notice of cancellation is a common practice in franchising, as it allows the franchisor to monitor franchisees' compliance with insurance requirements and mitigate risks associated with uninsured operations. Franchisees should factor the cost of insurance, including the specific coverage levels and notification requirements, into their overall business plan.