What is the consequence if a Bhc Master Franchisee fails to maintain the required insurance coverage?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Master Franchisee's failure, for any reason, to procure and maintain the insurance coverage required under this Agreement, will be deemed a material breach of this Agreement.
- (d) Master Franchisee must be fully covered in all areas of operating a business. If Master Franchisee does not procure and maintain the required insurance coverage Franchisor may, but are not required to, procure insurance coverage on Master Franchisee's behalf and to charge the costs to Master Franchisee together with a reasonable fee for the expenses Franchisor incurs.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if a Master Franchisee fails to procure and maintain the required insurance coverage, it will be considered a material breach of the agreement. In such a case, Bhc has the option, but not the obligation, to procure the necessary insurance coverage on behalf of the Master Franchisee. The Master Franchisee will then be charged for the costs of this insurance, along with a reasonable fee to cover Bhc's expenses.
This clause ensures that all Bhc Master Franchisees maintain adequate insurance, protecting both the franchisee and franchisor from potential liabilities. The Master Franchisee is responsible for notifying Bhc of any claims against them or Bhc under the insurance policies and must provide a certificate of insurance to Bhc upon issuance and renewal. This certificate must state that the policy cannot be canceled without 30 days' prior written notice to both the Master Franchisee and Bhc.
By reserving the right to obtain insurance on the franchisee's behalf, Bhc ensures continuous coverage and adherence to brand standards, even if the franchisee fails to comply. This protects the Bhc brand and minimizes potential disruptions to the business. The costs and fees associated with Bhc procuring insurance on behalf of the Master Franchisee are the responsibility of the Master Franchisee.