What is the reference for the insurance coverage requirements that a Belocal franchisee must meet to receive their first commission?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to all requirements related to the printing of the first issue of the Publication and Franchisee's compliance with this Agreement generally, payment of Franchisee's first Commission is specifically conditioned upon Franchisee being a legal entity rather than an individual and securing and producing evidence of all insurance coverage required pursuant to Section 12 of this Agreement.
12. INSURANCE; INDEMNIFICATION; INDEPENDENT CONTRACTOR
A. Insurance. Franchisee shall procure and maintain in full force and effect at all times during the Term of this Agreement, at Franchisee's expense, an insurance policy or policies protecting Franchisee against any demand or claim with respect to personal injury, death, or property damage, or any loss, liability, or expense whatsoever arising out of or occurring at or in connection with Franchisee's operation as an independent contractor. Such policy or policies must be written by a carrier approved or required by Franchisor and must include, but not be limited to, the following:
(1) Comprehensive General Liability Insurance, including broad-form contractual liability, broad-form property damage, personal injury, advertising injury, completed operations, products liability, and fire damage coverage, in the amount of $2,000,000 combined single limit per occurrence, $4,000,000 general aggregate.
(2) Automobile liability coverage, including coverage of owned, non-owned, and hired vehicles, with coverage in amounts not less than $300,000, combined single limit.
(3) Event insurance for each event Franchisee hosts or sponsors in connection with the Publication in the amount of $1,000,000 per occurrence, $2,000,000 in the aggregate, regardless of where the event is located.
(4) Such other insurance as may be required by the state or locality in which Franchisee operates the Franchised Business.
Franchisor reserves the right, in its sole discretion, to require Franchisee to procure and maintain in full force and effect at all times during the Term of this Agreement, at Franchisee's expense, any other insurance policies or coverages that Franchisor deems necessary, as well as higher policy limits, as specified by Franchisor from time to time in writing.
Franchisee may elect to have reasonable deductibles in connection with the coverage required under this Agreement. Such policies must also include a waiver of subrogation in favor of Franchisor, its affiliates, and the officers, directors, shareholders, partners, members, agents, representatives, independent contractors, servants, and employees of each of them. Franchisee's obligation to obtain and maintain the foregoing policies in the amounts specified are not limited in any way by reason of any insurance which may be maintained by Franchisor, nor will Franchisee's performance of such obligations relieve it of liability under the indemnity provisions set forth in Section 12.B. of this Agreement. All insurance policies required hereunder (except workers' compensation, if applicable) must name Franchisor and its affiliates, and the officers, directors, shareholders, partners, members, managers, agents, representatives, independent contractors, servants, and employees of each of them, as additional insureds and must expressly provide that such additional insureds' interests will not be affected by Franchisee's breach of any policy provisions and that the insurer must defend each additional insured in any covered action while reserving the additional insureds' right to involve counsel of their own choosing. Franchisee's insurance must apply as primary and non-contributory.
Should Franchisee, for any reason, fail to procure or maintain the insurance required by this Agreement, as such requirements may be revised from time to time by Franchisor in writing, Franchisor shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to Franchisee, which charges, together with a reasonable fee for Franchisor's expenses in so acting, shall be payable by Franchisee immediately upon notice. Franchisor may also, in its sole discretion, elect to reduce the compensation payable to Franchisee under Section 4. of this Agreement by an amount equal to the charges Franchisor incurs in procuring and maintaining such insurance coverage required by this Agreement. The foregoing remedies are in addition to any other remedies Franchisor may have at law or in equity.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee's eligibility for their first commission is contingent upon several factors, including securing and providing evidence of all required insurance coverage as outlined in Section 12 of the franchise agreement. This condition is in addition to meeting all requirements related to the printing of the first issue of the Publication and general compliance with the agreement.
Section 12 details the specific insurance policies a Belocal franchisee must maintain throughout the term of the agreement. These include Comprehensive General Liability Insurance with $2,000,000 combined single limit per occurrence and $4,000,000 general aggregate, Automobile liability coverage of at least $300,000 combined single limit, and Event insurance for each event the franchisee hosts or sponsors, amounting to $1,000,000 per occurrence and $2,000,000 in the aggregate. The franchisee is also responsible for any other insurance required by the state or locality in which they operate.
Belocal retains the right to modify these insurance requirements, including increasing policy limits, at its discretion, provided such changes are communicated in writing. The franchisee is responsible for covering the costs of these insurance policies and must ensure that Belocal and its affiliates are named as additional insureds, with a waiver of subrogation in favor of Belocal. Failure to maintain the required insurance allows Belocal to procure the necessary coverage and charge the franchisee, potentially reducing the franchisee's compensation to cover these costs. Therefore, understanding and securing the required insurance is crucial for a Belocal franchisee to receive their initial and subsequent commission payments.