When is the Insurance fee due to Beauty Bungalows?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| support vendors, mystery shopping, and customer feedback systems. The vendors and suppliers may bill franchisees directly, or we have the right to collect payment for these vendors together with a reasonable markup or charge for administering the payment program. | |||
| Alternative Supplier Evaluation | Our actual costs in inspecting, testing and investigating the alternative supplier or product, plus travel and living expenses. | Upon invoice | You may only use suppliers and products that we designate or approve in writing. If you propose an alternative supplier or product for use in your Beauty Bungalows Franchise, you must pay the costs of our investigation and testing of the supplier/product, including travel and living expenses incurred during the investigation and testing. |
| Insurance (Note 7) | Actual costs of obtaining insurance on your behalf plus a 10% administrative fee. | On demand | You must purchase the required insurance coverage described in Item 8. If you do not purchase and maintain the required insurance, we may purchase it on your behalf and you must reimburse us for the costs of insurance plus 10% of the premium as an administrative cost for obtaining insurance on your behalf. |
| Indemnification Costs and Attorney's Fees | Will vary according to circumstance | On demand | You must reimburse us for our attorneys' fees and other costs that we incur in connection with any third party claims brought against us that arise out of, or are related to, the operation of your Beauty Bungalows Franchise. You must pay us our attorney's fees and costs for enforcing the terms of any agreement between you and us if you do not comply with the terms of those agreements. |
| Lease Rider Review | $500 | Upon Invoicing | We will pass through the cost of having an attorney review the lease rider and negotiate with your landlord on our behalf if you hire an attorney, we have |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, if Beauty Bungalows purchases insurance on behalf of a franchisee, the insurance fee is due 'on demand'. This means that Beauty Bungalows will request payment from the franchisee when the cost is incurred. The fee covers the actual cost of the insurance plus a 10% administrative fee.
This arrangement is triggered if the franchisee fails to maintain the required insurance coverage as detailed in Item 8 of the FDD. By requiring franchisees to reimburse Beauty Bungalows for the cost of insurance plus an administrative fee, Beauty Bungalows ensures that all franchise locations maintain the necessary coverage, protecting both the franchisee and the franchisor from potential liabilities.
It is important for prospective franchisees to understand the insurance requirements outlined in Item 8 and to maintain their own insurance coverage to avoid incurring additional costs and administrative fees from Beauty Bungalows. Failing to maintain proper insurance could lead to Beauty Bungalows stepping in to secure coverage and billing the franchisee, which could strain the franchisee's finances.