Does the Alloy franchise agreement allow for different coverages and policy limits for all franchisees from time to time in writing?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
We may from time to time modify the required minimum limits and require additional insurance coverages, by providing written notice to you, as conditions require, to reflect changes in relevant circumstances, industry standards, experiences in the ALLOY system, standards of liability and higher damage awards. If you do not procure and maintain the required insurance coverage required by this Agreement, we have the right, but not the obligation, to procure insurance coverage and to charge the costs to you, together with a reasonable fee for the expenses we incur in doing so. You must pay these amounts to us immediately upon written notice.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the right to modify the required minimum insurance limits and require additional insurance coverages for franchisees. Alloy will provide written notice to franchisees when these modifications occur. These changes are implemented as conditions require, to reflect changes in relevant circumstances, industry standards, experiences within the Alloy system, standards of liability, and higher damage awards.
If a franchisee fails to procure and maintain the required insurance coverage as mandated by the Franchise Agreement, Alloy holds the right, but not the obligation, to obtain the necessary insurance coverage on behalf of the franchisee. The franchisee will be responsible for covering the costs associated with this insurance, in addition to a reasonable fee to cover Alloy's expenses for securing the coverage. The franchisee must remit these payments to Alloy immediately upon receipt of written notice.
This clause ensures that Alloy can adapt to changing legal and business conditions by adjusting insurance requirements. It also protects Alloy from potential liabilities arising from franchisees' operations. For a prospective franchisee, this means they need to be prepared for potential increases in insurance costs and the possibility of Alloy mandating additional coverage during the term of their agreement.