What proof of insurance is a Bath Tune Up franchisee required to furnish to the Secured Party?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Pledgor shall furnish certificates, policies or endorsements to Secured Party as Secured Party shall require as proof of such insurance, and, if Pledgor fails to do so, Secured Party is authorized, but not required, to obtain such insurance at the expense of Pledgor. All policies shall provide for at least thirty (30) days prior written notice to Secured Party of any cancellation or reduction of coverage and that Secured Party may act as attorney for Pledgor in obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance. Pledgor shall cause Secured Party to be named as a loss payee and an additional insured (but without any liability for any premiums) under such insurance policies and Pledgor shall obtain non-contributory lender's loss payable endorsements to all insurance policies in form and substance satisfactory to Secured Party. Such lender's loss payable endorsements shall specify that the proceeds of such insurance shall be payable to Secured Party as its interests may appear and further specify that Secured Party shall be paid regardless of any act or omission by Pledgor or any of its affiliates. At its option, Secured Party may apply any insurance proceeds received by Secured Party at any time to the cost of repairs or replacement of Collateral or to payment of the Obligations, whether or not then due, in any order and in such manner as Secured Party may determine or hold such proceeds as cash collateral for the Obligations.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a franchisee must furnish certificates, policies, or endorsements to the Secured Party as proof of insurance. The specific form of proof is determined by what the Secured Party requires. If the franchisee fails to provide this proof, the Secured Party is authorized, but not required, to obtain the insurance at the franchisee's expense.
All insurance policies must provide at least 30 days prior written notice to the Secured Party before any cancellation or reduction of coverage. Additionally, the Secured Party can act as the franchisee's attorney in obtaining, adjusting, settling, amending, and canceling such insurance if an Event of Default exists or has occurred and is continuing.
The Secured Party must be named as a loss payee and an additional insured under the insurance policies, without any liability for premiums. The franchisee must also obtain non-contributory lender's loss payable endorsements to all insurance policies in a form and substance satisfactory to the Secured Party. These endorsements must specify that insurance proceeds are payable to the Secured Party as their interests may appear, regardless of any act or omission by the franchisee or its affiliates. The Secured Party has the option to apply any insurance proceeds to the cost of repairs or replacement of collateral, or to payment of obligations, or hold such proceeds as cash collateral for the obligations.