Is the Aplus franchisee's obligation to obtain and maintain insurance limited by any insurance maintained by the Franchisor?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
the form and at such place as Franchisor prescribes, notifying the public of such independent ownership.
7.2. Insurance Obligations.
- 7.2.1. You shall maintain in full force and effect at all times during the term of this Agreement, at your expense, an insurance policy or policies meeting Franchisor's minimum insurance requirements. Each such policy shall be written by an insurance with an A.M. Best rating of not less than A-VII, shall be primary and non-contributory to any insurance carried by Franchisor or its Affiliates, and shall contain a waiver of subrogation in favor of Franchisor and its Affiliates. Franchisor has the right to increase or modify required minimum coverages at any time. Your obligation to obtain and maintain insurance is not limited in any way by reason of any insurance maintained by Franchisor, and your compliance with minimum insurance requirements will not relieve you of your indemnification obligations under Section 7.3 of this Agreement. At least 10 days prior to the time you are first required to carry insurance, and thereafter at least 30 days prior to the expiration of any policy, you shall deliver to Franchisor certificate of insurance evidencing your compliance with this Article 7. Each certificate of insurance shall expressly provide that no less than 30 days prior written notice shall be given to Franchisor in the event of material alteration to or cancellation or non-renewal of the coverages evidenced by such certificates.
- 7.2.2. If you fail to procure or maintain these minimum insurance requirements, Franchisor or its designee has the right (but is not required) to procure such insurance on your behalf. Such right shall be in addition to and not in lieu of any other rights or remedies available to Franchisor. If thi
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the franchisee's obligation to obtain and maintain insurance is not limited by any insurance maintained by Aplus. The franchisee must maintain insurance policies that meet Aplus's minimum requirements throughout the term of the agreement. These policies must be written by an insurance company with an A.M. Best rating of A-VII or higher and must be primary and non-contributory to any insurance carried by Aplus or its affiliates. Additionally, the policies must include a waiver of subrogation in favor of Aplus and its affiliates. Aplus retains the right to modify the minimum coverage requirements at any time.
The franchisee is required to provide Aplus with a certificate of insurance at least 10 days before the initial insurance requirement and at least 30 days before any policy's expiration. This certificate must provide a minimum of 30 days' written notice to Aplus in the event of any material alteration, cancellation, or non-renewal of the insurance coverage.
If the franchisee fails to maintain the minimum insurance requirements, Aplus has the right, but not the obligation, to procure the necessary insurance on the franchisee's behalf. If Aplus exercises this right, the franchisee must reimburse Aplus for the cost of the premium and pay an administrative fee, which shall not exceed $1,000, upon demand. This right is in addition to any other remedies available to Aplus due to the franchisee's failure to maintain adequate insurance coverage. Failure to obtain or maintain required insurance coverage is also grounds for termination of the agreement with a 10-day cure period.