What must a Bhc Master Franchisee do if their insurance coverage is canceled, non-renewed, or reduced?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Within 30 days after the Opening Date and promptly after each succeeding anniversary of the Opening Date, Master Franchisee must promptly notify Franchisor of any and all claims against Master Franchisee and/or Franchisor under said policies of insurance and deliver to Franchisor a certificate evidencing such insurance is in full force and effect. Such insurance certificate must contain a statement to the effect the certificate cannot be canceled without 30 days prior written notice to Master Franchisee and to Franchisor. Master Franchisee must notify Franchisor in writing immediately regarding any cancellation, non-renewal or reduction in coverage or limits.
- (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, a Master Franchisee must immediately notify Bhc in writing if their insurance coverage is canceled, non-renewed, or reduced. This requirement is in place to ensure that Bhc is promptly informed of any changes in the Master Franchisee's insurance status, allowing them to take appropriate action to protect their interests and maintain compliance with the franchise agreement.
Maintaining adequate insurance coverage is a critical aspect of the Master Franchise Agreement. Failure to do so is considered a material breach of the agreement, which could lead to penalties or even termination of the franchise. Bhc also has the option, but not the obligation, to procure insurance coverage on behalf of the Master Franchisee if they fail to maintain the required coverage. In such cases, the Master Franchisee will be responsible for the costs of the insurance, along with a reasonable fee for Bhc's expenses.
Bhc requires Master Franchisees to maintain comprehensive general liability insurance, automobile insurance, and any other legally required or reasonably prudent insurance for their business operations. The specific policy coverage requirements, limitations, and other terms are detailed in the Operations Manual. Additionally, all insurance policies must name Bhc and the Owner of the Marks as additional insureds. This ensures that Bhc is protected under the Master Franchisee's insurance policies, providing an added layer of security for the franchisor.