When is the administrative surcharge for insurance procured by the Beggars Pizza franchisor payable by the franchisee?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Should Franchisee, for any reason, fail to procure or maintain the insurance required by the Agreement, as such requirements may be revised from time to time by Franchisor in the Manual or otherwise in writing, Franchisor will have the right and authority (but not the obligation) to procure such insurance and to charge same to Franchisee, which charges, together with an administrative surcharge of ten percent (10%), will be payable by Franchisee immediately upon notice. The foregoing remedies will be in addition to any other remedies Franchisor may have.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, if a franchisee fails to procure or maintain the required insurance, Beggars Pizza has the right to obtain the insurance themselves. In this case, the franchisee will be charged for the insurance costs, in addition to an administrative surcharge of ten percent (10%).
The franchisee is required to pay these charges, including the surcharge, immediately upon notice from Beggars Pizza. This means that as a franchisee, you need to be prepared to cover these costs promptly to avoid further issues or potential breaches of the franchise agreement.
This clause protects Beggars Pizza by ensuring that all franchisees maintain adequate insurance coverage, which is crucial for protecting the brand and the entire franchise system from potential liabilities. It also places the onus on the franchisee to ensure they consistently meet the insurance requirements outlined in the franchise agreement and manuals. Failing to do so can result in unexpected costs and administrative burdens.