Can Afuri Ramen Dumpling increase the required amounts of insurance coverage during the term of the agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
as required by governing laws.
- 8.2.2 Franchisee shall also maintain such additional insurance as is necessary to comply with
all legal requirements concerning insurance as well as any other insurance required by Franchisee's landlord. Franchisor may periodically increase the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time, including higher liability limits, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances.
8.2.3 Each insurance policy shall: (1) name Franchisor and each of its affiliates, directors, agents and employees (as may be specified by Franchisor) as additional insureds on a primary, noncontributory basis and provide a waiver of subrogation rights against Franchisor; (2) provide for 30 days' prior written notice to us of any material modification, cancellation, or expiration of the policy; and (3) provide that coverage applies separately to each insured. In the case of property insurance, the Franchisor parties shall be named as their interests may appear. Insurance carriers must be authorized to do business in the state where your Franchise Premises is located, be rated at least A-X with A.M. Best and approved by us. At our discretion, we may require you to purchase your insurance from a specific insurance carrier. Upon request, you must provide us with proof of insurance in compliance with this Agreement.
Certificates of Insurance shall name Franchisor, and each of its affiliates, directors, agents and employees (as may be specified by Franchisor) as additional insureds, and include primary, noncontributory and waiver of subrogation endorsements. Certificates shall provide 30 days' notice prior written notice to Franchisor of any material modification, cancellation, or expiration of the policy, and due in our office 30 days prior to expiration and coverages listed above.
- 8.2.4 Franchisee shall provide Franchisor with evidence of the insurance required at least fifteen (15) days before the Franchise opens. Franchisee shall provide Franchisor with a complete copy of each insurance policy no later than thirty (30) days after delivery of the original proof of insurance, if required by Franchisor. Prior to the expiration of each insurance policy term, Franchisee shall furnish Franchisor with evidence of each renewal or replacement insurance policy to be maintained by Franchisee for the immediately following term and evidence of the payment of the premium thereof.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, Afuri Ramen Dumpling can periodically increase the required amounts of insurance coverage during the term of the franchise agreement. They may also require different or additional kinds of insurance at any time.
The reasons for these changes include reflecting inflation, identifying new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances. This means that as the franchisee's business environment evolves, Afuri Ramen Dumpling can adjust insurance requirements to ensure adequate protection for both the franchisee and the franchisor.
The franchisee is responsible for maintaining sufficient insurance coverage. The minimum requirements outlined by Afuri Ramen Dumpling do not constitute a representation that such minimum required insurance is sufficient for the franchisee's operations. The franchisee must provide evidence of the required insurance at least 15 days before the franchise opens and a complete copy of each insurance policy no later than 30 days after providing the original proof of insurance, if required by Afuri Ramen Dumpling. Prior to the expiration of each insurance policy term, the franchisee must furnish evidence of each renewal or replacement insurance policy and evidence of the payment of the premium.
If the franchisee fails to maintain the required insurance coverage or provide satisfactory evidence and payment of premiums, Afuri Ramen Dumpling has the option to obtain such insurance coverage on the franchisee's behalf. The franchisee is required to cooperate fully with Afuri Ramen Dumpling in obtaining the insurance policies, including executing necessary forms, allowing inspections of the premises, and paying all costs and premiums incurred by Afuri Ramen Dumpling. Failure to reimburse Afuri Ramen Dumpling for these costs within 15 days of a written demand can result in termination of the franchise agreement without an opportunity to cure.