Can Beef O Bradys change the minimum amounts of insurance coverage required for franchisees?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Coverage Requirements.
You must maintain the insurance coverages in the minimum amounts we prescribe from time-to-time in our System Standards.
We may periodically increase or decrease the amounts of coverage required under these insurance policies and require different or additional kinds of insurance at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes and circumstances.
(d) Policy Terms. All insurance policies you obtain and maintain must:
(i) No Limitations.
Contain no provision which in any way limits or reduces coverage for us in the event of any claim by us or any of our affiliates, directors, officers or agents;
- (ii) Indemnification.
Extend to provide indemnity for all obligations assumed by you under this Agreement and all items for which you are required to indemnify us under the provisions of this Agreement or otherwise;
- (iii) Additional Insureds.
Name us as additional insureds;
(iv) Subrogation. Contain a waiver of the insurance company's right of subrogation against us;
(v) Coverage.
Provide that the coverage afforded applies separately to each insured against whom a claim is brought as though a separate policy had been issued to each insured;
- (vi) Notice of Termination.
Provide that the insurance company will provide us with at least thirty (30) days' prior written notice of termination, expiration, cancellation or material modification of any policy; and
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, Beef O Bradys has the ability to modify the minimum insurance coverage amounts required for franchisees. Specifically, Beef O Bradys can increase or decrease the required coverage amounts periodically. They can also mandate different or additional types of insurance. These changes can be made to reflect factors such as inflation, the identification of new risks, changes in laws or liability standards, and higher damage awards.
This flexibility allows Beef O Bradys to adapt to changing circumstances and ensure that franchisees maintain adequate protection against potential liabilities. For a franchisee, this means that the cost of insurance could fluctuate over time, potentially impacting their operating expenses. It is important to stay informed of any changes to the insurance requirements and to factor in potential increases when budgeting.
Furthermore, franchisees must ensure that their insurance policies meet specific terms outlined by Beef O Bradys. These terms include naming Beef O Bradys as additional insureds, ensuring the policies extend to cover indemnification obligations, and providing Beef O Bradys with at least thirty days' notice of any policy termination or material modification. Franchisees are also responsible for providing evidence of coverage and premium payments to Beef O Bradys. Failure to meet the insurance requirements could result in Beef O Bradys obtaining insurance on the franchisee's behalf, with the franchisee responsible for promptly paying all associated costs and premiums.