What are the minimum insurance policies that a Buff City Soap franchisee must obtain and maintain for the Makery?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
15. INSURANCE.
- (a) Minimum Requirements. Franchisee must obtain and maintain in effect for the Makery the insurance policies set forth in Exhibit I, as may be amended by Franchisor from time to time. The insurance policies and limits described in Exhibit I will not limit, and are independent of, the indemnification obligations under this Agreement.
- (b) Proof of Insurance. Within 30 days after the execution of the Lease or purchase of the Premises for the Makery and, thereafter, at least 60 days prior to the expiration of any such policy, Franchisee will deliver to Franchisor evidence of such insurance in the form of certificates evidencing such coverage as well as endorsements reflecting the requirements of this Section 15 and all language wherever found in the policies that related to the determination of who is an additional insured, and the scope of the additional insured's coverage. Franchisor has the right, but not the obligation to inspect any actual policies required under this Agreement for compliance with all specified coverage, terms, conditions, endorsements, and limits relative to this Agreement.
- (c) Franchisor Placed Insurance. If Franchisee fails or refuses to maintain any required insurance coverage, or to furnish satisfactory evidence thereof, Franchisor, at Franchisor's sole option and in addition to Franchisor's other rights and remedies hereunder, may obtain such insurance coverage on Franchisee's behalf. If Franchisor does so, Franchisee must fully cooperate with Franchisor in Franchisor's effort to obtain such insurance policies and must pay Franchisor any costs and premiums that Franchisor incurs. Franchisee's obligation to maintain insurance coverage is not diminished in any manner by reason of any separate insurance Franchisor may choose to maintain, nor does it relieve Franchisee of any of its obligations under this Section 15.
- (d) Franchisee Acknowledgment as to Minimum Insurance Requirements Notification of Infringements and Claims. Franchisee acknowledges and agrees that the coverages required by Franchisor are the minimum amounts of coverage that Franchisee must procure under this Agreement. Franchisee is free to buy additional insurance coverage or increase the amounts of coverage as Franchisee deems appropriate.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, franchisees must obtain and maintain specific insurance policies for their Makery, as detailed in Exhibit I, which may be updated by Buff City Soap. These insurance requirements are separate from any indemnification obligations outlined in the franchise agreement. Franchisees must provide Buff City Soap with proof of insurance within 30 days of leasing or purchasing the premises, and at least 60 days before any policy expires. This evidence must include certificates of coverage and endorsements that meet the requirements of Section 15 of the agreement, along with any policy language related to additional insured status and coverage scope. Buff City Soap retains the right to inspect the actual insurance policies to ensure compliance.
If a franchisee fails to maintain the required insurance or provide satisfactory evidence, Buff City Soap has the option to obtain the necessary coverage on the franchisee's behalf. In such cases, the franchisee is required to cooperate fully and pay all associated costs and premiums incurred by Buff City Soap. It's important to note that Buff City Soap's decision to maintain separate insurance does not diminish the franchisee's obligation to maintain their own required coverage, nor does it relieve them of any responsibilities under Section 15 of the agreement.
The insurance coverage that Buff City Soap requires are the minimum amounts that a franchisee must secure under the Franchise Agreement. Franchisees have the option to acquire additional insurance coverage or raise the coverage amounts if they deem it necessary. The specific types and amounts of coverage are detailed in Exhibit I of the FDD. Prospective franchisees should carefully review Exhibit I and consult with an insurance professional to ensure they understand and can meet these requirements.