What happens if a Bens Soft Pretzels franchisee fails to maintain required insurance?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not procure and maintain the required insurance coverage required by this Agreement, we have the right, but not the obligation, to procure insurance coverage and to charge the costs to you, together with a reasonable fee for the expenses we incur in doing so. You must pay these amounts to us immediately upon written notice.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, if a franchisee fails to procure and maintain the required insurance coverage, Bens Soft Pretzels has the right, but not the obligation, to procure the insurance coverage themselves. The franchisee will then be charged for the costs of the insurance, along with a reasonable fee for the expenses Bens Soft Pretzels incurs in obtaining the coverage.
The franchisee is required to pay these amounts to Bens Soft Pretzels immediately upon receiving written notice of the charges. This means a franchisee could face unexpected expenses if they let their insurance lapse or fail to obtain the correct coverage.
This clause in the franchise agreement protects Bens Soft Pretzels from potential liabilities and ensures that all franchise locations maintain adequate insurance coverage. It is fairly standard practice in franchising for the franchisor to have the right to obtain insurance on behalf of a franchisee who fails to do so, with the costs passed on to the franchisee. This helps maintain brand consistency and protect the entire franchise system from potential risks.