Under what circumstances is a Pump It Up franchisee required to reimburse costs and expenses?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification (1) | Fines, losses, damages, costs and expenses we incur. | Upon demand. | Payable if we incur any losses due to your breach of the Franchise Agreement or any other action or inaction by you or any other person relating to your Franchise. |
| Reimbursement of Costs and Expenses (1) | Costs and expenses we incur in fulfilling obligations you fail to perform, plus interest at the rate noted above in this Item 6. | Upon demand. | If you fail to fulfil certain obligations and we then have the right to perform the obligations, you will reimburse us for all costs and expenses in connection with that performance. |
| Insurance Costs (5) | Actual cost. | Upon demand. | If you fail to obtain the insurance we specify, we may obtain such insurance for you and you must reimburse us for all premiums, costs and expenses we incur, plus a reasonable fee for our time incurred in obtaining such insurance. |
| New Product and Supplier Review (1) | Actual cost of the inspection. | As incurred. | Incurred if you request to use a vendor or product not previously used by us, and we elect to investigate such vendor or product and incur costs in investigating the vendor and/or testing the product to confirm compliance with System Standards. |
Source: Item 6 — OTHER FEES (FDD pages 15–21)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, franchisees may be required to reimburse costs and expenses under several circumstances. One instance is if the franchisee fails to fulfill certain obligations outlined in the franchise agreement, and Pump It Up then has the right to perform those obligations on the franchisee's behalf. In such cases, the franchisee must reimburse Pump It Up for all costs and expenses connected with that performance, including interest.
Another instance where reimbursement is required is related to insurance. If a Pump It Up franchisee fails to obtain the insurance coverage specified by the franchisor, Pump It Up has the right to obtain the necessary insurance, and the franchisee must then reimburse Pump It Up for all premiums, costs, and expenses incurred, along with a reasonable fee for the franchisor's time spent securing the insurance.
Additionally, if a Pump It Up franchisee requests approval to use a vendor or product not previously approved by the franchisor, the franchisee may have to cover the costs of the inspection. If Pump It Up elects to investigate the vendor or test the product to ensure it meets system standards, the franchisee will be responsible for reimbursing the actual costs incurred during the investigation. These reimbursements are payable upon demand.