What are the consequences if a B Bops franchisee fails to maintain the required insurance coverage, considering Item 9?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
interest (at the rate disclosed above) from the date of payment by the Company. Situations in which the Company is entitled to reimbursement for the performance of your obligations include, without limitation: (a) your failure to procure insurance coverage for the Franchise; (b) your failure to maintain the Franchise in a clean, safe and attractive condition; or (c) your failure upon termination or expiration of the Franchise Agreement to cease all display of the Licensed Marks or to make such modifications and alterations to the Franchise premises as may reasonably be necessary to effectively distinguish the Franchise premises from the appearance of a B-Bop's Restaurant.
MULTIPLE-UNIT ARRANGEMENT
If you purchase development rights from the Company, you will be required to establish the number of Franchises prescribed by the Development Agreement and, for each Franchise, to execute the standard form of franchise agreement being used by the Company at the time each Franchise is established. On each occasion that you execute the standard franchise agreement for the establishment of a Franchise, you will be required by such agreement to pay a variety of fees and amounts to the Company. The fees and payments imposed under the current Franchise Agreement are described in the table set forth above. You should understand, however, that the standard form of franchise agreement utilized by the Company in the future may impose fees and payments that materially differ in amount and nature from those described above.
7.
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, franchisees are required to maintain insurance coverage for their franchise. If a franchisee fails to procure this insurance coverage, B Bops has the right to procure the insurance themselves and charge the franchisee for the cost.
Specifically, B Bops can seek reimbursement for the costs of procuring insurance on behalf of the franchisee, along with interest. The interest will be calculated from the date B Bops makes the payment for the insurance. This reimbursement is in addition to any other remedies B Bops may have under the franchise agreement.
Furthermore, franchisees must indemnify B Bops against any losses, damages, liabilities, or expenses arising from the operation of the franchise. This indemnification obligation is separate from the insurance obligations, meaning that even if a franchisee carries insurance, they are still responsible for covering any losses that the insurance doesn't fully cover. Franchisees are required to report any losses to B Bops within ten days, regardless of whether the loss is covered by insurance.