What statement must the insurance certificate contain regarding cancellation of the Bhc Master Franchisee's insurance?
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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the insurance certificate that the Master Franchisee provides must include a statement indicating that the policy cannot be canceled without giving both the Master Franchisee and Bhc a 30-day prior written notice. This requirement ensures that Bhc is informed of any potential lapse in the Master Franchisee's insurance coverage, allowing them time to address the issue.
This requirement is in place to protect Bhc from potential liabilities and risks associated with the Master Franchisee's operations. By mandating a 30-day notice, Bhc can take necessary steps to ensure continuous coverage, either by requiring the Master Franchisee to reinstate the policy or, if necessary, securing insurance on their behalf and charging the costs to the Master Franchisee.
Furthermore, the Master Franchisee is obligated to notify Bhc immediately in writing regarding any cancellation, non-renewal, or reduction in coverage or limits of their insurance policy. This immediate notification, along with the 30-day notice requirement on the insurance certificate, ensures that Bhc remains informed and can promptly address any changes in the Master Franchisee's insurance coverage to mitigate potential risks.