What happens if an Anago franchisee fails to maintain the required insurance coverage?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 9.6 YOUR FAILURE TO MAINTAIN INSURANCE.
If You fail to maintain the insurance required by this Agreement, We have the right and authority (without any obligation to do so) immediately to procure the insurance and to charge You for the cost of the insurance, plus interest at the maximum rate permitted by law, which charges, together with a reasonable fee for Our expenses in so acting, You agree to pay immediately upon notice.
SECTION 9.7 GROUP INSURANCE.
If We make available to You insurance coverage through group or master policies We arrange including property and casualty, workers' compensation, liability and health, life and/or disability insurance, You may participate, at Your expense, in this group insurance program. We may charge a reasonable fee for administering any group insurance program. Our insurance will not cover any losses incurred by Your operations outside the Anago System, which work will be done at Your sole risk. All work done by You outside the Anago System is done solely at Your risk.
ARTICLE 10 - TRANSFER OF INTEREST
SECTION 10.1 TRANSFER BY US.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if a franchisee fails to maintain the required insurance, Anago has the right, but not the obligation, to procure the insurance and charge the franchisee for the cost, plus interest at the maximum rate permitted by law, along with a reasonable fee for expenses incurred. This cost is to be paid immediately upon notice. Anago may also periodically adjust the required coverage amounts and types, including excess liability insurance, to reflect changes like inflation or new risks, provided these changes are system-wide, including company-owned units.
Anago also has the right to participate in discussions with the franchisee's insurance company or any claimant regarding a claim and the franchisee agrees to adopt Anago's reasonable recommendations regarding claim settlements. The franchisee's obligation to maintain required insurance is not limited by any insurance Anago maintains, nor does Anago's performance of the franchisee's obligations relieve the franchisee of indemnity responsibilities under the agreement.
Subfranchisors are required to obtain insurance coverage through the Anago National Insurance program during the entire term. All liability policies will name Anago as the additional insured and will provide that Anago will receive notice of Subfranchisor's default in payment of any premium and 30 days' prior written notice of termination, cancellation, expiration or alteration to provide less coverage. The insurance afforded by any liability policy will not be limited in any way by reason of any insurance maintained by Franchisor. Subfranchisor is responsible for payment of all deductibles, should a claim arise.
Unit Franchisees must provide proof of every required coverage. If not insured through Subfranchisor's policy, they must notify Subfranchisor of any changes or lapse in coverage, with failure to do so considered a material default. Certificates of Insurance and Declarations Pages typically will not list all of the coverage's required by Subfranchisor. Upon request, Franchisees may need to provide copies of the entire insurance policy, including all endorsements, in order to provide evidence of that they meet all of the above requirements.