Under what circumstances can Afuri Ramen Dumpling increase the required insurance coverage?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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 may periodically increase the amounts of coverage required under insurance policies and may also require different or additional kinds of insurance at any time. This includes potentially mandating higher liability limits for franchisees.
These changes can be made to reflect several factors. These include inflation, which can erode the value of existing coverage, the identification of new risks that were not previously apparent, and changes in laws or standards of liability that may necessitate higher coverage levels.
Additionally, Afuri Ramen Dumpling may increase insurance requirements to account for higher damage awards being granted in legal cases or other relevant changes in circumstances that could increase a franchisee's potential liability. This provision allows Afuri Ramen Dumpling to ensure that all franchise locations maintain adequate protection against potential financial losses, aligning with common practices in the franchise industry to safeguard both the brand and individual franchisees.