What statement must be included on the insurance certificate provided by Bhc franchisees to the franchisor?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Within 30 days after the Opening Date and promptly after each succeeding anniversary of the Opening Date, Franchisee must promptly notify Franchisor of any and all claims against 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 Franchisee and to Franchisor.
Franchisee must notify Franchisor in writing immediately regarding any cancellation, non-renewal or reduction in coverage or limits.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the insurance certificate provided by the franchisee must include a specific statement regarding cancellation. The certificate must state that the insurance policy cannot be canceled without providing 30 days prior written notice to both the franchisee and Bhc. This requirement ensures that Bhc is aware of any potential lapse in insurance coverage, allowing them to take necessary steps to protect their interests and maintain compliance with the franchise agreement.
This requirement is in place so that Bhc can ensure continuous coverage and mitigate risks associated with potential liability. Franchisees are also obligated to notify Bhc immediately in writing if there is any cancellation, non-renewal, or reduction in the coverage or limits of their insurance policies. This immediate notification is crucial for Bhc to assess the impact and ensure that the franchisee takes corrective action to maintain adequate coverage.
Failure to maintain the required insurance coverage is considered a material breach of the franchise agreement. If a franchisee fails to procure and maintain the necessary insurance, Bhc has the option, but not the obligation, to obtain insurance coverage on behalf of the franchisee. In such cases, the franchisee will be charged for the cost of the insurance, along with a reasonable fee to cover Bhc's expenses. This provision underscores the importance of franchisees adhering to the insurance requirements outlined in the franchise agreement to avoid potential financial burdens and maintain compliance.