Who bears the expense of the insurance policies for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee must procure and maintain in full force at all times during the Term of this Agreement, at Franchisee's sole expense, on a primary rather than a participatory basis with Franchisor, an insurance policy or policies protecting Franchisee as named insured and naming, as additional insureds, Franchisor, Franchisor's affiliates, Franchisor's successors and assigns, and the officers, directors, shareholders, partners, agents, representatives, independent contractors and employees of Franchisor against any demand or claim with respect to personal injury, death or property damage, or any loss, liability or expense whatsoever arising or occurring upon or in connection with the Franchised Business. The policy or policies must be written by a responsible carrier or carriers with an AM Best Rating of at least A-, VII and reasonably acceptable to Franchisor.
The currently required insurance policies, insurance coverage requirements, and insurance coverage amounts are designated and set forth in the operations manual. Franchisor may, in Franchisor's Reasonable Business Judgment, periodically change the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. Notwithstanding the immediately foregoing sentence, Franchisor shall not increase such minimum coverage more than once every two years. All public liability and property damages policies must contain a provision that Franchisor is entitled to recover under these policies on any loss occasioned to Franchisor, Franchisor's affiliates, Franchisor's successors and assigns, and the officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, and employees of Franchisor by reason of the negligence of Franchisee and/or Franchisee's officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, and employees.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the franchisee is responsible for covering the expenses of all insurance policies during the term of the franchise agreement. The franchisee must secure and maintain these policies at their sole expense, ensuring they are primary and not participatory with Bang Cookies. These policies should protect the franchisee as the named insured and also name Bang Cookies, its affiliates, successors, assigns, officers, directors, shareholders, partners, agents, representatives, independent contractors, and employees as additional insureds. The insurance must cover any claims related to personal injury, death, property damage, loss, liability, or expenses connected to the franchised business.
The insurance policies must be written by carriers with an AM Best Rating of at least A-, VII, and must be reasonably acceptable to Bang Cookies. The specific types of insurance, coverage requirements, and amounts are detailed in the operations manual, which Bang Cookies can update periodically based on reasonable business judgment. These changes may include adjustments for inflation, new risks, changes in law, higher damage awards, or other relevant circumstances, but Bang Cookies will not increase the minimum coverage more than once every two years.
All public liability and property damage policies must include a provision that allows Bang Cookies to recover under these policies for any losses caused by the negligence of the franchisee or their officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, and employees. This ensures that Bang Cookies is protected from liabilities arising from the franchisee's operations. This requirement is typical in franchising, as it protects the franchisor from potential financial losses due to the franchisee's actions.