What fitness franchisors require of franchisees: the insurance section of a gym or studio franchise agreement and how to prove you meet it

What your fitness franchisor requires

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A fitness franchise agreement typically requires general liability of $1M per occurrence and $2M aggregate with no participant exclusion and the franchisor as additional insured, professional liability of $1M per claim for instruction, an umbrella of $1M to $5M, replacement-cost property on equipment and the build-out, business income covering rent and royalties, statutory workers' compensation, abuse coverage where the brand requires it, and the brand's member waiver.

Reviewed by Michael LaBarbera, Licensed property & casualty agent, Provident Financial Group · Reviewed Oct 11, 2026 Updated Oct 14, 2026

Typical requirements and how to check them
Requirement	What they usually ask for	How to check what you have
Commercial general liability	$1M each occurrence / $2M aggregate with the franchisor, its parent and affiliates as additional insureds, primary and non-contributory, on a form with no athletic participant exclusion	Dec page limits, the additional insured form and the exclusions page; a participant exclusion fails the agreement regardless of limits.
Professional liability for instruction	$1M per claim / $2M aggregate for group instruction, personal training and coaching, including independent trainers working under the brand	A fitness professional liability coverage part or policy; many fitness programmes combine it with general liability on one form.
Sexual abuse and molestation coverage	Required by some brands, particularly those with youth programs, personal training or locker-room supervision, at $1M per occurrence	A coverage part with its own limit; the manual states whether and at what limit it is required.
Umbrella or excess liability	$1M to $5M following form over general, professional and employers' liability, higher for brands with heated classes, climbing, pools or youth programs	Umbrella dec page and underlying schedule; confirm it follows form over professional and abuse coverage.
Property on equipment and the branded build-out	Replacement cost on the brand's equipment package, flooring, mirrors, sound and access systems and the fit-out, often with a minimum tied to the initial investment	Business personal property and tenant improvements limits with equipment breakdown for powered machines.
Business income including royalties	Rent, royalties, technology fees and continuing expenses through a covered closure, commonly twelve months, with extra expense for member refunds and a temporary location	Business income line and period of restoration; confirm royalties are within the limit.
Workers' compensation and employers' liability	Statutory plus employers' liability of $500K or $1M; independent trainers covered or carrying their own with certificates on file	Information page of the policy; trainers' certificates where the agreement requires them.
Member waivers and emergency equipment	Use of the brand's membership agreement and waiver, an automated external defibrillator on site where the brand or state requires it, and staff certifications current	Not insurance: the signed waiver form in use, the equipment on site and the certification records; carriers underwrite on the same items.

Requirement

What they usually ask for

How to check what you have

Commercial general liability

$1M each occurrence / $2M aggregate with the franchisor, its parent and affiliates as additional insureds, primary and non-contributory, on a form with no athletic participant exclusion

Dec page limits, the additional insured form and the exclusions page; a participant exclusion fails the agreement regardless of limits.

Professional liability for instruction

$1M per claim / $2M aggregate for group instruction, personal training and coaching, including independent trainers working under the brand

A fitness professional liability coverage part or policy; many fitness programmes combine it with general liability on one form.

Sexual abuse and molestation coverage

Required by some brands, particularly those with youth programs, personal training or locker-room supervision, at $1M per occurrence

A coverage part with its own limit; the manual states whether and at what limit it is required.

Umbrella or excess liability

$1M to $5M following form over general, professional and employers' liability, higher for brands with heated classes, climbing, pools or youth programs

Umbrella dec page and underlying schedule; confirm it follows form over professional and abuse coverage.

Property on equipment and the branded build-out

Replacement cost on the brand's equipment package, flooring, mirrors, sound and access systems and the fit-out, often with a minimum tied to the initial investment

Business personal property and tenant improvements limits with equipment breakdown for powered machines.

Business income including royalties

Rent, royalties, technology fees and continuing expenses through a covered closure, commonly twelve months, with extra expense for member refunds and a temporary location

Business income line and period of restoration; confirm royalties are within the limit.

Workers' compensation and employers' liability

Statutory plus employers' liability of $500K or $1M; independent trainers covered or carrying their own with certificates on file

Information page of the policy; trainers' certificates where the agreement requires them.

Member waivers and emergency equipment

Use of the brand's membership agreement and waiver, an automated external defibrillator on site where the brand or state requires it, and staff certifications current

Not insurance: the signed waiver form in use, the equipment on site and the certification records; carriers underwrite on the same items.

What the franchisor is protecting

A fitness franchisor protects the brand across every location from injury claims, which are frequent and severe in exercise formats: additional insured status on each unit's liability policies written without participant exclusions, professional coverage for instruction, an umbrella sized to the format, abuse coverage where the brand's programs call for it, and the member waiver that defends every claim. Property and business income keep units open and royalties flowing.

The lines a fitness franchise agreement names

General liability with the franchisor added and no participant exclusion. Professional liability matched to the brand's formats. Abuse coverage where required. An umbrella that follows form over both. Property on the equipment package and build-out. Business income including royalties and technology fees. Workers' compensation, with independent trainers addressed. The brand's waiver, an AED and staff certifications.

How to check your policies against the agreement

Read the general liability exclusions page first, then match the limits and the additional insured form. Confirm professional liability covers the brand's formats and abuse coverage where required. Check the umbrella's limit against the manual's figure for your format and its underlying schedule. Compare property and business income to the equipment package, build-out and royalty obligations. Confirm workers' compensation and the trainer arrangement, and use the brand's waiver form.

Keep the certificate current

Franchisor portals expire certificates at each renewal and flag non-compliant units, which can affect renewal and transfer of the franchise. A live certificate link stays current as policies renew and notifies the franchisor when a line changes, with the official PDF attached.

Questions people actually ask

Why does the franchisor reject policies with an athletic participant exclusion?

Because the exclusion removes coverage for the brand's core activity: a member injured during exercise. Fitness programmes write general liability without it; a general BOP often carries it, which is why the manual names the exclusion.

Does the franchisor's umbrella minimum apply to every location?

Usually the agreement sets a floor and the manual raises it for formats with higher severity, such as heated classes, climbing walls, pools or youth programs. Check the manual for your format.

Our trainers are independent contractors. Whose insurance does the franchisor want?

The brand wants every person training members covered: either your general and professional policies extend to independent trainers, or each trainer carries their own with certificates on file. The agreement and your carrier decide which.

Why does the manual mention the member waiver in the insurance section?

Because the waiver is the first line of defence in an injury claim and the brand's form has been drafted and tested for that purpose. Carriers price on it too; using an unapproved waiver can breach the agreement and raise your premium band.