What happens if a Beggars Pizza franchisee fails to procure or maintain the required insurance?
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, but not the obligation, to procure the insurance themselves. The franchisee will then be charged for the cost of the insurance, along with an additional administrative surcharge of ten percent. This amount is payable immediately upon notice from Beggars Pizza.
Beggars Pizza requires franchisees to obtain and maintain specific insurance policies, naming Beggars Pizza and Begcom as additional insureds. These policies must cover personal injury, death, property damage, and other potential liabilities related to the restaurant's operation. The specific types and minimum amounts of coverage are detailed in the manual. Franchisees must provide certificates of insurance to Beggars Pizza and/or Begcom at least 30 days before the commencement of operations and 30 days before the expiration of any policy.
This clause ensures that Beggars Pizza is protected from potential liabilities arising from the franchisee's operations. The franchisee's obligation to maintain the required insurance is not limited by any insurance that Beggars Pizza may carry. Furthermore, Beggars Pizza is entitled to recover under the franchisee's policies for any losses caused by the franchisee's negligence. The right to procure insurance on the franchisee's behalf is in addition to any other remedies Beggars Pizza may have, which could include penalties or even termination of the franchise agreement.