Does Fly To Fit require 'Special' causes of loss coverage forms?
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 are required to obtain specific insurance coverage, including "Special" causes of loss coverage forms. This coverage must include 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.
In addition to the "Special" causes of loss coverage, Fly To Fit franchisees must also maintain business interruption insurance covering at least 12 months of income. They are also required to have Commercial General Liability insurance with a $1,000,000 single limit per occurrence and a $2,000,000 aggregate limit, Business Automobile Liability insurance of not less than $1,000,000, and Workers Compensation coverage as mandated by state law.
The insurance policies, excluding Workers Compensation, must list Fly To Fit and its affiliates as additional insured parties and include a waiver of subrogation in their favor. These policies must also be primary and non-contributing with any insurance held by Fly To Fit or its affiliates. Furthermore, the insurance provider must give Fly To Fit 30 days' prior written notice of any policy cancellation.
These insurance requirements are typical in franchising to protect both the franchisee's business and the franchisor's brand. Franchisees should factor these insurance costs into their initial investment and ongoing operating expenses. It is important to consult with an insurance professional to ensure that the coverage meets Fly To Fit's requirements and adequately protects the business from potential losses.