Can 1 800 Packouts increase or decrease the amounts of insurance coverage required at any time?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
You must maintain these policies during the entire term of your Franchise Agreement. We may increase or decrease the amounts of coverage required under these insurance policies and require different or additional kinds of insurance at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. All insurance policies must name us (and our officers, directors and employees) as additional insureds, contain a waiver by the insurance carrier of all subrogation rights against us, and must provide that we will receive 30 days advance written notice of any material modification, cancellation, or termination or expiration of the policy. You must provide us with a copy of the certificate of or other evidence of the procurement, renewal or extension of each insurance policy within 30 days after signing the Franchise Agreement and each year thereafter.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–29)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, 1 800 Packouts has the authority to modify the required insurance coverage amounts at any time during the franchise term. This includes both increasing and decreasing coverage levels. They can also mandate different or additional types of insurance. These changes can be made to reflect factors such as inflation, the identification of new risks, changes in laws or liability standards, and higher damage awards.
1 800 Packouts requires franchisees to maintain specific insurance policies throughout the term of the Franchise Agreement. These policies must name 1 800 Packouts (and their officers, directors, and employees) as additional insureds and include a waiver of subrogation rights against them. Furthermore, the insurance carrier must provide 1 800 Packouts with 30 days' advance written notice of any material modification, cancellation, termination, or expiration of the policy.
As a 1 800 Packouts franchisee, you must provide 1 800 Packouts with a copy of the certificate or other evidence of insurance procurement, renewal, or extension within 30 days after signing the Franchise Agreement and annually thereafter. This ensures that 1 800 Packouts remains informed about your insurance coverage and can verify compliance with their requirements. The insurance policies must be issued by insurance carriers rated not less than "A-" by A.M. Best Company.
This flexibility in insurance requirements allows 1 800 Packouts to adapt to changing business conditions and legal landscapes, which can protect both the franchisor and the franchisee from potential liabilities. However, it also means that a franchisee's insurance costs could increase unexpectedly during the term of the agreement, impacting their profitability. Prospective franchisees should factor in potential insurance cost fluctuations when evaluating the financial viability of the franchise.