When must a Baya Bar franchisee provide a certificate of insurance?

According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee must provide a certificate of insurance when they sign the lease for the shop premises or 90 days after signing the Franchise Agreement, whichever comes first. Additionally, franchisees must provide a certificate of insurance within ten days of each policy's renewal.

This requirement ensures that the Baya Bar franchisee has obtained and maintains the necessary insurance coverage as specified by Baya Bar, their lease terms, and applicable laws. The insurance must be maintained throughout the term of the Franchise Agreement and obtained from a licensed carrier with a rating of at least "A-VII" with A.M. Best Company. The policy must be on an "occurrence" basis.

The certificate of insurance serves as proof that the franchisee has secured the required insurance policies, protecting both the franchisee and Baya Bar from potential liabilities and financial losses. Baya Bar has the right to change the insurance requirements during the term of the Franchise Agreement, including the types and amounts of coverage, and the franchisee must comply with these changes. If a franchisee fails to obtain the required insurance, Baya Bar has the right, but not the obligation, to purchase insurance on the franchisee's behalf, with the franchisee responsible for reimbursing the costs plus a 10% administrative fee.

This requirement is typical in franchising, as franchisors need to protect their brand and manage risk across all franchise locations. By mandating specific insurance coverage and timely submission of certificates, Baya Bar aims to maintain a consistent level of protection throughout its franchise network.