When is the insurance cost due to Angry Chickz if they obtain insurance on behalf of the franchisee?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Insurance | Cost of insurance plus our costs in obtaining the insurance for you. | Upon demand, see Remarks | If you do not obtain and maintain the requisite insurance coverage, we may, at our option, purchase such insurance for you must pay us the premiums and our costs in obtaining such insurance. |
Source: Item 6 — OTHER FEES1 (FDD pages 11–15)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if a franchisee does not obtain and maintain the required insurance coverage, Angry Chickz has the option to purchase the insurance on behalf of the franchisee. If Angry Chickz exercises this option, the franchisee must pay the cost of the insurance, along with Angry Chickz's costs incurred in obtaining the insurance. This payment is due to Angry Chickz upon demand.
This means that if an Angry Chickz franchisee fails to secure the necessary insurance, they are not only responsible for the insurance premiums but also any additional costs Angry Chickz incurs to obtain the insurance. The franchisee will be required to reimburse Angry Chickz promptly when Angry Chickz demands payment.
It is common practice in franchising for franchisors to require franchisees to maintain specific insurance coverage to protect both the franchisee's business and the overall brand. Franchisors often have the right to secure insurance on behalf of the franchisee if the franchisee fails to do so, with the franchisee bearing the costs. This ensures continuous coverage and minimizes risk for all parties involved.