Is business interruption insurance required for a Pump It Up franchise, and if so, for what period?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
00 combined single limit, and $2,000,000 general aggregate limit; (5) guaranteed or extended cost replacement
property insurance (and contingent liability and building ordinance coverage if you or an entity controlled by you own the building in which the Franchised Business is operated) on building and business personal property including personal property of others; and (6) business interruption insurance adequate for a six month period including the payments to us of our continuing royalty based on the average of your past three operating months. We also recommend that you obtain sexual and physical abuse coverage with limits of no less than $50,000 per occurrence. You should verify with your own risk management advisor wheth
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, franchisees are required to obtain business interruption insurance. This insurance must be adequate to cover a six-month period. The coverage should include payments to Pump It Up for continuing royalties, calculated based on the average of the franchisee's past three operating months.
In addition to business interruption insurance, Pump It Up also requires franchisees to maintain other insurance policies, including comprehensive general liability insurance, worker's compensation and employer's liability insurance, employment benefits liability coverage, and automobile liability insurance. The franchisor also recommends that franchisees obtain sexual and physical abuse coverage with limits of no less than $50,000 per occurrence. Franchisees should consult with their own risk management advisor to determine if additional coverage is necessary.
Pump It Up mandates that all insurance policies be written by a licensed insurance company in the state where the franchise is located and meet the franchisor's minimum standards and specifications. These standards are provided in the FDD, the Franchise Agreement, the Manuals, or in writing. Pump It Up reserves the right to increase the minimum required coverage or modify insurance requirements at any time to reflect changes in circumstances, such as inflation or new risks. Franchisees will receive written notice of such modifications and must promptly secure the additional coverage or higher policy limits. All insurance policies must name Pump It Up and any designated affiliates as additional named insureds and provide for 30 days' prior written notice of any material modification, cancellation, or expiration of the policy.