What must a Bhc franchisee do if there is any cancellation, non-renewal, or reduction in coverage or limits to their insurance policy?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must notify Franchisor in writing immediately regarding any cancellation, non-renewal or reduction in coverage or limits.
- (g) 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.
- (h) Franchisee must be fully covered in all areas of operating a business. If Franchisee does not procure and maintain the required insurance coverage Franchisor may, but are not required to, procure insurance coverage on Franchisee's behalf and to charge the costs to 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, a franchisee must immediately notify Bhc in writing if there is any cancellation, non-renewal, or reduction in coverage or limits to their insurance policy. This requirement ensures that Bhc is promptly informed of any changes to the franchisee's insurance coverage that could potentially impact the business or expose Bhc to additional risk.
Maintaining adequate insurance coverage is critical for Bhc franchisees. The FDD states that failure to procure and maintain the required insurance coverage is considered a material breach of the franchise agreement. This highlights the importance Bhc places on franchisees having sufficient insurance to protect both their business and the Bhc brand from potential liabilities.
If a franchisee fails to maintain the required insurance, Bhc has the option, but not the obligation, to procure insurance coverage on the franchisee's behalf. In such cases, the franchisee will be responsible for covering the costs of the insurance, along with a reasonable fee for Bhc's expenses incurred in obtaining the coverage. This provision protects Bhc from potential losses resulting from a franchisee's lack of adequate insurance and ensures the business remains compliant with insurance requirements.