If Beggars Pizza procures insurance for a franchisee who failed to do so, what charges can the franchisee expect?
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 cost of the insurance, along with an additional administrative surcharge.
The franchisee is responsible for immediately paying these charges upon notification from Beggars Pizza. The administrative surcharge is explicitly stated as ten percent (10%) of the insurance cost.
This clause ensures that all Beggars Pizza locations maintain the necessary insurance coverage, protecting both the franchisee and the franchisor from potential liabilities. It also incentivizes franchisees to maintain their own insurance, as relying on Beggars Pizza to procure it results in additional costs.