Is Anago obligated to obtain insurance on behalf of a franchisee who fails to maintain coverage?

According to Anago's 2025 Franchise Disclosure Document, Anago has the right, but not the obligation, to procure insurance for a franchisee who fails to maintain the required coverage. If Anago chooses to obtain insurance, the franchisee is responsible for the cost of the insurance, plus interest at the maximum rate permitted by law, along with a reasonable fee for Anago's expenses in procuring the insurance. These charges are due immediately upon notice from Anago.

This means that while Anago is not required to step in and provide insurance, they have the option to do so to protect their interests and ensure compliance with the franchise agreement's insurance requirements. If Anago exercises this right, the franchisee will incur additional costs, including premiums, interest, and administrative fees.

It is crucial for prospective Anago franchisees to understand their insurance obligations and maintain continuous coverage to avoid potential financial burdens and ensure they are protected against liabilities. Franchisees should clarify with Anago the specific procedures and timelines related to procuring insurance in case of a franchisee's failure to maintain coverage.