For a Big O Tires franchise, by when must the franchisee procure and maintain the required insurance coverage?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.01 Insurance Coverage. Franchisee shall, at its expense and no later than upon the Commencement Date (or the Effective Date, if later), procure and maintain in full force and effect throughout the term of this Agreement insurance that shall be in such coverages, limits and amounts as may from time to time be required by Big O in the Manual or otherwise and which shall designate Big O and Big O's Affiliates designated by Big O, and their directors, officers, employees, agents and other Big O designees as additional named insured(s).
- 21.02 Proof of Insurance. Prior to the Commencement Date (or the Effective Date, if later), Franchisee shall make timely delivery of a signed original certificate or certificates of all required insurance coverages to Big O, which shall contain the authorized agent's business name, address and phone number, together with a statement by the insurer that the policy will not be canceled or materially changed without at least sixty (60) days prior written notice to Big O that the alteration or cancellation is being made. All insurance coverages will be underwritten by a company acceptable to Big O, with a Best's Rating of no less than "A-" or a financial statement of the insurer approved by Big O. If Franchisee fails to purchase required insurance conforming to the standards prescribed by Big O, Big O may obtain such insurance for Franchisee, and Franchisee shall pay Big O the cost of such insurance plus a ten percent (10%) administrative surcharge. If Big O deems it appropriate, Franchisee shall, upon Big O's request, provide to Big O a true, complete certified copy of all, or a part of the Franchisee's insurance policies within 10 days of receiving such request. The Franchisee shall provide to Big O renewal certificates of insurance, or certified insurance binders, for all required coverages no fewer than 10 days before the indicated anniversary date(s) of such insurance coverages.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, a franchisee must procure and maintain the required insurance coverage no later than the Commencement Date or the Effective Date, whichever is later. This insurance must remain in full force and effect throughout the term of the Franchise Agreement.
Big O Tires specifies that the insurance coverage must be in the coverages, limits, and amounts required by Big O Tires, as detailed in the Manual or otherwise communicated. The insurance policy must designate Big O Tires, its affiliates, directors, officers, employees, agents, and other designees as additional named insureds.
Prior to the Commencement Date (or the Effective Date, if later), the franchisee must provide Big O Tires with a signed original certificate of all required insurance coverages. This certificate must include the authorized agent's business name, address, and phone number, along with a statement from the insurer that the policy will not be canceled or materially changed without at least sixty days prior written notice to Big O Tires. The insurance company must have a Best's Rating of no less than "A-" or an approved financial statement. Failure to purchase the required insurance allows Big O Tires to obtain the insurance for the franchisee, with the franchisee responsible for the cost plus a 10% administrative surcharge. Franchisees must also provide renewal certificates or insurance binders no fewer than 10 days before the anniversary dates of the insurance coverages.