What insurance policy documentation must a Boulder Designs franchisee furnish to the franchisor before opening?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
tive Date, Franchisor has the right to terminate this Agreement with no refund to Franchisee of any amounts if Franchisee fails to cure such default within a thirty (30) day period.
Section 5.5 Opening
Before opening the Franchised Business and commencing business, Franchisee must:
i. fulfill all of its obligations pursuant to the other provisions of this Section 5.6;
- ii. furnish Franchisor with copies of all insurance policies required by this Agreement and by the lease (if the Approved Location is leased), or such other evidence of insurance coverage and payment of premiums as Franchisor may request;
- iii. complete initial training to the satisfaction of Franchisor;
- iv. hire and train the personnel necessary or required for the operation of the Franchised Business;
- v. obtain all necessary permits and licenses;
- vi. purchase all Opening Project inventory not purchased pursuant to Section 5.4, as stated in Section 8.2;
- vii. if Franchisee is a business entity, Franchisee has caused each of its stock certificates or other ownership interest certificates to be conspicuously endorsed upon the face thereof a statement in a form satisfactory to Franchisor that such ownership interest is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement; and
- viii. pay in full all amounts due to Franchisor, or execute the Promissory Note and Security Agreement (attached hereto as Exhibit 9, if applicable) for any amounts due Franchisor.
Franchisee shall comply with these conditions and be prepared to continuously operate the Franchised Business within 180 days after the Effective Date. Time is of the essence.
5.5.1 BY VIRTUE OF COMMENCING OPERATIONS OF YOUR BUSINESS, FRANCHISEE ACKNOWLEDGES THAT FRANCHISOR HAS FULFILLED ALL OF ITS OBLIGATIONS TO FRANCHISEE THAT FRANCHISOR IS REQUIRED TO FULFILL PRIOR TO THE OPENING OF YOUR BOULDER DESIGNS BUSINESS.
Section 5.6 Use of Approved Location
Franchisee shall not use the Approved Location for any purpose other than for the operation of a BOULDER DESIGNS Business in full compliance with this Agreement and the Manual.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, before opening their business, a franchisee must furnish Boulder Designs with copies of all required insurance policies. This includes policies required by the Franchise Agreement and by the lease, if the Approved Location is leased. Alternatively, the franchisee can provide other evidence of insurance coverage and payment of premiums as Boulder Designs may request.
The required insurance policies include "all risk" property insurance, general commercial liability insurance of at least $1,000,000 per occurrence with a $2,000,000 general aggregate, comprehensive general liability insurance of at least $30,000 per occurrence and aggregate, workers' compensation insurance for statutory limits and employer's liability insurance of at least $500,000, vehicle replacement insurance to cover the cost of acquiring a replacement vehicle (typically around $30,000), and automobile liability coverage of at least $1,000 combined single limit. All insurance policies must name Boulder Designs as an additional insured and waive any right to assert a claim against Boulder Designs. The policies must also undertake to notify Boulder Designs 30 days in advance of any cancellation or material change.
It is important to note that Boulder Designs has the right to reasonably increase the minimum liability protection requirement annually and require different or additional insurance coverages to reflect inflation, changes in standards of liability, future damage awards, or other relevant changes in circumstances. The franchisee must provide Boulder Designs with certificates of coverage at least annually. If the franchisee fails to provide the certificate of insurance, Boulder Designs may purchase such insurance on behalf of the franchisee, and the franchisee must immediately reimburse Boulder Designs for the expenses and premiums paid.