Massage Heights Joins Growing List of Franchisors Investing in Litigation Insurance

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Cherry Creek Insurance Serves Rising Number of Franchisors with Unique Form of Coverage

August 06, 2008 // Franchising.com // Denver, CO – Cherry Creek Insurance, one of the nation's top independent insurance agencies, announced today that Massage Heights, a fast-growing massage therapy franchise, has joined a growing list of franchise organizations to invest in Cherry Creek's franchisor litigation insurance – a rare form of insurance protection offered by only a handful of firms specializing in this niche coverage nationwide.

The coverage ultimately protects franchisors from a wide variety of lawsuits. In addition to paying covered claims, the policy covers legal defense costs related to the covered claims. Defense costs from one of these lawsuits can cost as much as the franchisor litigation insurance policy annual policy premium in just four to five months, said Scott Carlson, Cherry Creek's Director of Management Liability.

According to Massage Heights CEO Glenn Franson, the growing chain of massage therapy retreats grossed more than $7 million in 2007 revenues, up from $3 million in 2006. As the franchise system continues to expand around the country, he decided to take the proactive step to implement franchisor litigation insurance as a way to protect the company's hard earned assets from potential litigation matters in the future.

"In the end, we have peace of mind of protection, allowing our staff at the home office to focus on the franchisor to franchisee relationship, and overall franchise system growth," Franson noted.

Massage Heights is one of numerous franchise companies investing in comprehensive franchisor litigation insurance offered by Cherry Creek Insurance. Today, they work with a wide variety of franchise systems, including Maui Wowi, Bark Busters, Jungle Quest, among other leading franchise systems. The company plans to triple its franchise division in 2008, as they are becoming the "go-to" agent nationally for franchisor litigation insurance.

Cherry Creek Insurance Agency estimates that nearly 80 percent of franchisors are currently without franchisor litigation insurance. However, the agency sees that percentage shrinking as it continues to educate the franchise industry on the topic.

"Most franchisors operate under the false belief think that franchisee lawsuits are covered by general liability insurance, and when a big dispute arises, they're forced to pay expensive legal fees to resolve the franchisee dispute," Carlson noted. "We can foresee a reduction in these types of misconceptions as an increasing number of franchisors, such as Massage Heights, take proactive steps to implement franchisor litigation insurance. In doing so, they are minimizing their out of pocket litigation expenses, and protecting their overall profitability."

The total insurance and risk management solutions provided by Cherry Creek also protects individual franchise locations. A Cherry Creek agent analyzes the insurance needs for the franchise group and each individual franchisee. Risk exposures can vary by region, volume, etc. The agent then selects the best fit from a diverse group of insurance carriers at the best price.

Carlson works with each franchisor client to develop a total franchisor litigation insurance solution for the organization. In fact, he has negotiated with several national and international insurance carriers to offer broadened coverage at reduced premiums to IFA members. "Cherry Creek Insurance's franchise litigation insurance policy is the very comprehensive exclusive to IFA members," he said.

About Cherry Creek

Cherry Creek, founded in 1986, is an independent insurance agency with a diverse stable of insurance carriers. As one of Colorado's top employers, Cherry Creek has built a highly successful insurance brokerage firm with an emphasis on relationships. For additional information, visit www.cherrycreekins.com

About Massage Heights

Founded in 2004, Massage Heights is the premium massage retreat that offers a tranquil atmosphere, experienced staff, soothing services and convenience at an affordable price. Massage Heights is reaching dramatic elevations in an exploding industry, focused on providing affordable luxury products and services for the mind, spirit and body. With 31 franchise locations open, company plans call for 288 more by 2010, with a total of 1,620 locations within the next five years. For more information, visit www.massageheights.com.

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