What obligation do Azal Coffee franchisees have regarding insurance coverage for their indemnification obligations?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
We will have the right to engage a vendor to consult with and advise Azal Coffee franchisees on compliance with the PCI Requirements and Information Security Standards and to require you to pay a portion of the cost of the vendor's services as determined under our policies and procedures or to directly engage the vendor for these purposes. Also, we have the right to acquire a cyber insurance policy for the Azal Coffee franchise system and to require you to pay a portion of the cost of the cyber insurance policy as determined under our policies and procedures. We will have the
right to collect your share of the costs of the vendor and/or cyber insurance policy on a periodic basis in the manner provided in Section 4.13 of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, franchisees may be required to pay a portion of the cost for a cyber insurance policy acquired by Azal Coffee for the franchise system. Azal Coffee retains the right to acquire this cyber insurance and mandate franchisee participation in covering its costs.
This means that as an Azal Coffee franchisee, you might have to contribute to the expenses of a cyber insurance policy that the franchisor deems necessary for the entire franchise network. The exact portion of the cost that you would be responsible for will be determined by Azal Coffee's policies and procedures. The franchisor can collect your share of these costs periodically, as detailed in Section 4.13 of the Franchise Agreement.
While the FDD excerpt specifies cyber insurance, it does not detail specific insurance requirements related to indemnification obligations. Prospective franchisees should inquire with Azal Coffee about what specific insurance coverages are required to satisfy their indemnification obligations under the Franchise Agreement.