Is the franchisee required to reimburse Bevaris Alliance for insurance premiums?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
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- You must reimburse us for premium and other out-of-pocket costs incurred in connection with us procuring insurance on your behalf plus an administrative fee of 10% of the premium, if we choose to procure such insurance.
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, franchisees may be required to reimburse Bevaris Alliance for insurance premiums under certain conditions. Specifically, if Bevaris Alliance chooses to procure insurance on behalf of the franchisee, the franchisee must reimburse Bevaris Alliance for the premium costs and any other out-of-pocket expenses incurred.
In addition to reimbursing the premium and out-of-pocket costs, the franchisee is also responsible for paying an administrative fee. This fee is calculated as 10% of the insurance premium. Therefore, the total cost to the franchisee would be the sum of the premium, any out-of-pocket costs, and the 10% administrative fee.
This arrangement is not uncommon in franchising, as it allows the franchisor to ensure that all franchisees maintain adequate insurance coverage. However, it's important for prospective Bevaris Alliance franchisees to understand that this cost is in addition to the initial franchise fee and other ongoing fees. Franchisees should inquire about the typical cost of such insurance and under what circumstances Bevaris Alliance would choose to procure insurance on their behalf to better estimate their potential expenses.