Are the Bhc franchisee's insurance procurement obligations related to their indemnity obligations?

According to Bhc's 2025 Franchise Disclosure Document, the franchisee's insurance obligations are separate from their indemnity obligations. Specifically, the FDD states that a franchisee's obligation to obtain and maintain insurance policies is not limited by any insurance maintained by Bhc. Furthermore, securing the required insurance does not relieve the franchisee of liability under the indemnity provisions outlined in section 16.2 of the Franchise Agreement. This means that even if a franchisee has the required insurance coverage, they are still responsible for fulfilling their indemnity obligations as defined in the agreement.

This separation of insurance and indemnity has significant implications for Bhc franchisees. It means that having insurance does not automatically protect them from all liabilities. Franchisees must understand their indemnity obligations, which typically involve protecting Bhc from losses, damages, or claims arising from the franchisee's operation of the business. The franchisee remains responsible for these indemnity obligations, regardless of their insurance coverage.

For a prospective Bhc franchisee, this highlights the importance of carefully reviewing and understanding both the insurance requirements and the indemnity provisions in the Franchise Agreement. It would be prudent to consult with an attorney and insurance professional to fully assess the risks and ensure adequate protection. Franchisees should also confirm that their insurance policies align with the specific indemnity obligations outlined in the agreement to avoid potential gaps in coverage.