Is a Byrider franchisee allowed to reduce the policy limits, restrict coverage, cancel, or otherwise alter or amend said insurance policies without the Company's written consent?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee shall not reduce the policy limits, restrict coverage, cancel or otherwise alter or amend said insurance policies without the Company's written consent.
- 12.2 The Company's Right to Purchase. If the Franchisee fails to purchase insurance conforming to the standards and limits prescribed by the Company, the Company may (but is not required to) obtain, through agents and insurance companies of its choosing, the minimum amount of insurance specified in Subsections 12.1.A.(1) through (5).
Payments for such insurance shall be borne by the Franchisee and the Franchisee expressly agrees to forthwith pay the required premiums or to reimburse the Company therefor.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee is not allowed to reduce the policy limits, restrict coverage, cancel, or otherwise alter or amend their insurance policies without Byrider's written consent. Byrider requires that they receive at least thirty days' written notice before any changes are made to the insurance policy.
This requirement ensures that Byrider is protected and aware of any changes to the franchisee's insurance coverage. This is a fairly standard practice in franchising, as franchisors need to protect their brand and avoid potential liabilities arising from underinsured franchisees.
If a franchisee fails to purchase insurance that conforms to Byrider's standards and limits, Byrider has the right, but not the obligation, to obtain the minimum required insurance coverage. The franchisee is then responsible for reimbursing Byrider for the premiums paid. Failure to maintain the required insurance can be considered a material breach of the franchise agreement, potentially leading to termination of the agreement.