To whom are insurance costs paid for a Punch King Fitness franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| TYPE OF EXPENDITURE | AMOUNT | METHOD OF PAYMENT | WHEN DUE | TO WHOM | |
|---|---|---|---|---|---|
| PAYMENT IS MADE | |||||
| Insurance7 | $1,000 to $2,000 | As incurred | Before Beginning Operations | Insurance Companies |
You must purchase insurance in the following amounts and coverage: General Liability in the amount of $1,000,000. The amounts you pay for insurance are typically non-refundable. You should inquire about the cancellation and refund policy of the insurance carrier or agent at or before the time of purchase.
The insurance will not be limited in any way because of any insurance we maintain. Maintenance of the required insurance will not diminish your liability to us under the indemnities contained in the franchise agreement. The policy or policies will insure against our vicarious liability for actual and (unless prohibited by applicable law) punitive damages assessed against you.
We may require you to increase the minimum limits of and types of coverage to keep pace with regular business practice and prudent insurance custom.
Your insurance policies must insure us, you, and our respective affiliates, subsidiaries, owners, officers, directors, partners, members, employees, servants, and agents against any loss, liability, products liability, personal injury, death, or property damage that may accrue due to your operation of your Business. Your policies of insurance will contain a separate endorsement naming us and our affiliates as additional named insureds. You are required to submit an insurance certificate to our office on an annual basis.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–22)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, franchisees are required to purchase insurance coverage, with general liability coverage of $1,000,000. The payments for this insurance, which range from $1,000 to $2,000, are made directly to insurance companies. These insurance costs are part of the initial investment needed to start the franchise and are typically non-refundable. Franchisees should inquire about the cancellation and refund policies of the insurance carrier or agent before purchasing.
It is important to note that the insurance policies must cover Punch King Fitness, its affiliates, subsidiaries, owners, officers, directors, partners, members, employees, servants, and agents against any loss, liability, products liability, personal injury, death, or property damage resulting from the franchisee's business operations. Additionally, Punch King Fitness may require franchisees to increase their coverage limits and types to align with standard business practices and prudent insurance customs.
Franchisees must provide an insurance certificate to Punch King Fitness annually. The insurance coverage obtained by the franchisee will not limit any insurance maintained by Punch King Fitness, nor will it reduce the franchisee's liability to Punch King Fitness under the indemnities in the franchise agreement. The insurance policy will also protect Punch King Fitness against vicarious liability for actual and punitive damages assessed against the franchisee, unless prohibited by law. Therefore, understanding the full scope and requirements of the insurance policies is crucial for prospective Punch King Fitness franchisees.