What is the consequence of not maintaining the required insurance coverage as a Stretch Zone franchisee?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
As discussed in ITEM 8, we require that you carry certain insurance specified in the Operations Manual.
The method and timing of payments is between you and your insurer.
We require you to use R.V.
Johnson Insurance as your Insurance Agent.
Because the selection of the carrier, size of the Premises, location of the Premises, value of the leasehold improvements, amount of inventory, amount of wages and other related conditions vary considerably, it is difficult to estimate the ultimate cost for any given franchisee.
We base this estimate on the rates in effect in Florida.
The cost of workers' compensation insurance varies from state to state.
Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Item 8 discusses insurance requirements, and Item 6 mentions that Stretch Zone requires franchisees to carry certain insurance specified in the Operations Manual. However, the document excerpts provided do not detail the specific consequences a franchisee might face for failing to maintain the required insurance coverage.
While the FDD excerpts highlight the obligation to secure insurance through R.V. Johnson Insurance as the Insurance Agent and adhere to the coverage types and amounts outlined in the Operations Manual, it stops short of explicitly stating the repercussions of non-compliance. The cost of insurance is also discussed, noting variations based on factors like location and leasehold improvements.
To fully understand the potential ramifications of not maintaining adequate insurance, a prospective Stretch Zone franchisee should carefully review Item 8 of the FDD and consult the Operations Manual. It would be prudent to ask the franchisor directly about the specific penalties or actions Stretch Zone could take if a franchisee fails to meet the insurance requirements, such as potential termination of the franchise agreement or liability for uncovered claims.