What happens if a Buns On Fire franchisee fails to pay insurance premiums?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
the area for similar operations.
12.5 Notification of Claim
Franchisee shall immediately notify Franchisor, in writing, of any accidents, injury, occurrence or claim that might give rise to a liability or claim against Franchisor or which could materially affect Franchisee's business, and such notice shall be provided no later than the date upon which Franchisee notifies his/her insurance carrier.
12.6 Franchisor May Purchase Insurance
If Franchisee fails to obtain or maintain the required insurance, or fails to provide certificates to Franchisor upon Franchisor's request, then Franchisor may obtain insurance on behalf of the franchisee from any vendor of Franchisor's choosin
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, if a franchisee fails to obtain or maintain the required insurance or fails to provide certificates of insurance upon request, Buns On Fire has the option to obtain insurance on behalf of the franchisee. This insurance can be obtained from any vendor of Buns On Fire's choosing.
The franchisee is then required to reimburse Buns On Fire for the cost of the insurance premium, in addition to a $2,500 fee to cover Buns On Fire's administrative time and costs. This reimbursement, including the fee, is payable upon demand from Buns On Fire.
If the franchisee does not reimburse Buns On Fire within five days of the demand, interest will begin to accrue on the amount owed, as per Section 5.5 of the Franchise Agreement. This clause ensures that Buns On Fire can maintain adequate insurance coverage for the franchised business, protecting both the franchisee and the franchisor from potential liabilities, while also ensuring that the franchisee bears the financial responsibility for failing to maintain their own insurance coverage.