Can a Beggars Pizza franchisee's insurance obligations be limited by any insurance maintained by the franchisor?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2 No Waiver. Franchisee's obligation to obtain and maintain the policy or policies in the amounts specified in the Manual will not be limited in any way by reason of any insurance which may be maintained by Franchisor, nor will Franchisee's performance of that obligation relieve it of liability under the indemnity provisions set forth in Section 20.3.
- 13.3 Franchisor Entitled to Recover. All public liability and property damage policies must contain a provision that Franchisor, although named as an insured, will nevertheless be entitled to recover under such policies on any loss occasioned to Franchisor or its servants, agents, or employees by reason of the negligence of Franchisee or its servants, agents, or employees.
- 13.4 Certificates of Insurance. Prior to the commencement of any operations under the Agreement, and thereafter at least thirty (30) days prior to the expiration of any policy, Franchisee must deliver to Franchisor and/or Begcom (as specified in the Manual) Certificates of Insurance evidencing the proper types and minimum amounts of coverage. All Certificates must expressly provide that no less than thirty (30) days' prior written notice must be given Franchisor if material alteration to or cancellation of the coverages evidenced by such Certificates occurs. Neither Franchisor nor Begcom will deliver any products under the Agreement until Franchisee has provided evidence of the required product liability insurance coverage to Franchisor and/or Begcom as specified in the Manual.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, a franchisee's insurance obligations are not limited by any insurance the franchisor may maintain. The franchisee is required to obtain and maintain the types and minimum amounts of insurance coverage specified in the Manual, regardless of any insurance held by Beggars Pizza.
Furthermore, all public liability and property damage policies must include a provision that Beggars Pizza, even when named as an insured, can recover under the franchisee's policies for any losses caused by the franchisee's negligence or that of their employees. This ensures that Beggars Pizza can seek compensation from the franchisee's insurance coverage for any damages or liabilities arising from the franchisee's operations.
Prior to commencing operations, a Beggars Pizza franchisee must provide Certificates of Insurance to the franchisor and/or Begcom (as specified in the Manual), demonstrating the required coverage types and amounts. These certificates must guarantee at least thirty days' prior written notice to the franchisor in case of any material alteration or cancellation of the insurance coverage. Beggars Pizza will not deliver any products under the Franchise Agreement until the franchisee provides evidence of the required product liability insurance coverage. This protects both the franchisee and franchisor from potential financial losses due to operational mishaps or liabilities.