What is the consequence if a Byrider franchisee fails to purchase or maintain required insurance?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
he Company within five (5) business days of any such claim or demand. The Franchisee agrees to respond to all claims within the time required by law, rule or regulation. The Franchisee shall cooperate with the Company (or its designee) to defend the Company and the Franchisee against any and all claims made by employees, customers or third parties. The Franchisee shall, when necessary, make appearances at administrative or other hearings to present or reinforce such defenses.
- 12.6 Failure to Insure Right to Terminate. Failure by the Franchisee to purchase or maintain any insurance required by this Agreement, or failure to reimburse the
Company for its purchase of such insurance on behalf of the Franchisee, shall constitute a material and incurable breach of this Agreement which, unless waived by the Company, shall entitle the Company to terminate this Agreement unilaterally and immediately upon notice to the Franchisee, and this Agreement shall thereafter be null, void and of no effect (except for those post-termination and post-expiration provisions which by their nature shall survive). Notwithstanding the above provision, Franchisee shall have the right to cure such default within ten (10) days from notification by Franchisee's insurance company that such insurance has lapsed.
12.7 Minimum Coverages. The minimum limits of insurance coverage required to be procured by the Franchisee may be modified from time to time by the Company, in its sole discretion, by written notice transmitted by the Company to the Franchisee. Upon delivery (or attempted delivery) of such written notice, the Franchisee shall be obligated to immediately purchase insurance conforming to the newly established standards and limits prescribed by the Company. The Company may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverages (including reasonable excess liability insurance) at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. Franchisee must routinely furnish the Company copies of its Certificate of Insurance or other evidence of maintaining this insurance coverage and paying premiums.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, if a franchisee fails to purchase or maintain the required insurance, it constitutes a material and incurable breach of the Franchise Agreement. Unless Byrider waives the breach, Byrider is entitled to terminate the agreement unilaterally and immediately upon notice to the franchisee. After termination, the agreement becomes null, void, and of no effect, except for provisions that survive termination.
However, the franchisee has a chance to correct the failure. The franchisee has the right to cure the default within ten days from notification by the franchisee's insurance company that such insurance has lapsed.
Byrider also has the option, but not the obligation, to obtain the minimum required insurance coverage if the franchisee fails to do so. In this case, the franchisee is responsible for paying or reimbursing Byrider for the insurance premiums.