Does Beggars Pizza's insurance coverage limit the franchisee's obligation to maintain the insurance policies specified in the manual?
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.
- 13.5 Franchisor's Right to Procure. 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, the franchisee's obligation to maintain insurance policies as specified in the manual is not limited by any insurance coverage that Beggars Pizza may maintain. The franchisee is responsible for obtaining and maintaining the required insurance coverage, and this responsibility is not waived or reduced due to any insurance held by Beggars Pizza. This ensures that the franchisee remains liable under the indemnity provisions outlined in Section 20.3 of the franchise agreement, regardless of Beggars Pizza's insurance policies.
Furthermore, Beggars Pizza is entitled to recover under the franchisee's public liability and property damage policies for any losses incurred due to the franchisee's negligence, even though Beggars Pizza is named as an insured on those policies. This provision protects Beggars Pizza from financial losses resulting from the franchisee's actions or the actions of their employees or agents. The franchisee must also provide Certificates of Insurance to Beggars Pizza and/or Begcom, at least 30 days prior to the expiration of any policy, evidencing the required coverage amounts and types. These certificates must also 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.
If a franchisee fails to procure or maintain the necessary insurance, Beggars Pizza has the right, but not the obligation, to obtain the insurance on behalf of the franchisee. In such cases, the franchisee will be charged for the cost of the insurance, along with an additional administrative surcharge of ten percent (10%), payable immediately upon notice. This ensures that the restaurant remains adequately insured, protecting both the franchisee and Beggars Pizza from potential liabilities. This remedy is in addition to any other remedies Beggars Pizza may pursue for the franchisee's failure to maintain adequate insurance coverage.