Is Bor Restoration named as the beneficiary of the Franchisee Life Insurance Policy?

According to Bor Restoration's 2024 Franchise Disclosure Document, franchisees are required to pay the then-current Franchisee Life Insurance Policy Fees. Bor Restoration uses these fees to purchase a life insurance policy for the franchisee, but Bor Restoration itself is named as the beneficiary. Upon the franchisee's death, Bor Restoration will use the insurance proceeds to manage the franchisee's Bor Restoration business until the estate disposes of it.

After the sale or assumption of the Bor Restoration business, any remaining benefits from the life insurance policy will be retained by Bor Restoration. This means that while the franchisee is paying for the life insurance policy, the primary financial benefit, beyond the interim management of the business, accrues to the franchisor rather than the franchisee's family or estate.

This arrangement is not typical in franchising. Usually, life insurance policies required by a franchisor would benefit the franchisee's family or business partners, ensuring business continuity or providing financial security to the franchisee's beneficiaries. The fact that Bor Restoration retains any remaining benefits after the sale or assumption of the business is a significant point for prospective franchisees to consider. Franchisees should seek clarification on the specific costs of the Franchisee Life Insurance Policy Fees and the potential financial implications for their estate.