Under what circumstances can the Bhc Franchisor procure insurance coverage on behalf of the Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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, if a Master Franchisee fails to procure and maintain the required insurance coverage, Bhc has the option, but not the obligation, to procure insurance coverage on the Master Franchisee's behalf.
If Bhc chooses to procure insurance, the Master Franchisee will be charged for the costs of the insurance coverage. In addition to the insurance costs, Bhc will also charge a reasonable fee to cover the expenses Bhc incurs while obtaining the insurance.
This clause in the franchise agreement protects Bhc from potential liabilities arising from the Master Franchisee's operations. It also ensures that the Master Franchisee's business remains operational and compliant with legal and contractual obligations, even if the Master Franchisee fails to maintain the required insurance.