What happens if I, as a Stretch Zone franchisee, fail to maintain the required insurance?

According to the 2025 Stretch Zone Franchise Disclosure Document, Item 6 discusses insurance requirements, referring to Item 8 and the Operations Manual for specifics. It states that franchisees must carry certain insurance, with the risks, coverage amounts, and deductibles outlined in the Operations Manual. Stretch Zone requires franchisees to use R.V. Johnson Insurance as their Insurance Agent.

However, the FDD excerpt does not explicitly state the consequences of failing to maintain the required insurance. Typically, franchise agreements specify that failure to maintain adequate insurance constitutes a breach of contract. This can lead to penalties, including fines, suspension of franchise operations, or even termination of the franchise agreement. The franchisor's interest in requiring insurance is to protect the brand and the entire franchise system from potential liabilities arising from accidents, injuries, or other unforeseen events at the franchisee's location.

Since the consequences of failing to maintain insurance are not detailed in the provided FDD excerpts, it is crucial for a prospective Stretch Zone franchisee to carefully review Item 8 of the FDD and the Operations Manual, as well as the franchise agreement itself. These documents should outline the specific types and amounts of insurance required, as well as the repercussions for non-compliance. A prospective franchisee should also discuss this matter directly with the franchisor to gain a clear understanding of the potential ramifications.