Is Baya Bar obligated to purchase insurance on behalf of a franchisee who fails to obtain it?

According to Baya Bar's 2024 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage for their Shop. This includes coverage for property loss, business interruption, general liability, automobile liability, and workers' compensation, among other potential requirements. Franchisees must secure this insurance when they sign the lease for the Shop or 90 days after signing the Franchise Agreement, whichever comes first. They must also provide Baya Bar with proof of insurance and policy renewals.

However, Baya Bar does not have an obligation to purchase insurance on behalf of a franchisee who fails to obtain the required coverage. Instead, Baya Bar retains the right, but not the obligation, to purchase the necessary insurance if the franchisee does not comply with the insurance requirements.

If Baya Bar chooses to purchase insurance on behalf of a non-compliant franchisee, the franchisee is responsible for reimbursing Baya Bar for the costs incurred. In addition to the cost of the insurance, Baya Bar will also charge a 10% administrative fee. This policy ensures that Baya Bar can protect its interests and brand reputation while placing the financial responsibility for maintaining adequate insurance coverage on the franchisee.