What are the policy requirements for insurance that Apricot Lane franchisees must adhere to, as detailed in Section 16?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 16: INSURANCE
A. Policy Requirements
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- FRANCHISEE shall procure at its expense and maintain in full force and effect during the term of this Agreement, an insurance policy or policies protecting FRANCHISEE and FRANCHISOR and its officers, directors, partners and employees, against loss or liability in such types and amounts of coverage as FRANCHISOR may reasonably require for its own and FRANCHISEE's protection, including but not limited to commercial general liability and products liability coverage, all risk coverage on the Franchised Business, business interruption insurance, automobile liability insurance and workers' compensation insurance. FRANCHISOR shall be named an additional insured in such policy or policies. Required insurance specifications shall be provided to FRANCHISEE in writing in the Confidential Operations Manual or otherwise and may be modified from time to time, as FRANCHISOR deems necessary or appropriate in its reasonable discretion.
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- Such policy or policies shall be written by an insurance company licensed in the state in which FRANCHISEE operates and having at least an "A" Rating Classification as indicated in Best's Key Rating Guide in accordance with standards and specifications set forth in the Confidential Operations Manual or otherwise in writing.
B. Certificate of Insurance
The insurance afforded by the policy or policies respecting liability shall not be limited in any way by reason of any insurance that may be maintained by FRANCHISOR. Within sixty (60) days of the signing of this Agreement, but in no event later than the date on which FRANCHISEE acquires an interest in the real property on which it will develop and operate the Franchised Business, a Certificate of Insurance showing compliance with the foregoing requirements shall be furnished by FRANCHISEE to FRANCHISOR for approval. Such certificate shall state that said policy or policies will not be canceled or altered without at least thirty (30) days prior written notice to FRANCHISOR and shall reflect proof of payment of premiums. Maintenance of such insurance and the performance by FRANCHISEE of the obligations under this paragraph shall not relieve FRANCHISEE of liability under the indemnity provision set forth in this Agreement. Minimum limits as required above may be modified from time to time, as conditions require, by written notice to FRANCHISEE or by modifications to the Confidential Operations Manual.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, Section 16 outlines the insurance requirements for franchisees. Apricot Lane franchisees are required to obtain and maintain insurance policies at their own expense throughout the term of the agreement. These policies must protect both the franchisee and Apricot Lane, including its officers, directors, partners, and employees, against potential losses or liabilities. The types and amounts of coverage must meet Apricot Lane's reasonable requirements for its own and the franchisee's protection.
Specifically, the required insurance includes commercial general liability, products liability coverage, all-risk coverage on the franchised business, business interruption insurance, automobile liability insurance, and workers' compensation insurance. Apricot Lane must be named as an additional insured in all such policies. The specific insurance specifications are provided in writing within the Confidential Operations Manual or separately and may be modified as Apricot Lane deems necessary.
The insurance policies must be written by a company licensed in the state where the franchisee operates and have an "A" Rating Classification or better, as indicated in Best's Key Rating Guide. Franchisees must furnish Apricot Lane with a Certificate of Insurance within 60 days of signing the agreement, and no later than when they acquire an interest in the real property for their business. This certificate must show compliance with all insurance requirements and state that the policies will not be canceled or altered without at least 30 days' prior written notice to Apricot Lane, and it must also reflect proof of premium payments. The minimum insurance limits can be modified by written notice or modifications to the Confidential Operations Manual.