If a Byrider franchisee fails to purchase the required insurance, can the Company purchase it on their behalf?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
d non-contributory with respect to any other insurance purchased by the Company;
- (4) Provide, by endorsement, that the Company is entitled to receive at least thirty (30) days prior written notice of any intent to reduce policy limits, restrict coverage, cancel or otherwise alter or amend said policy.
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. Nothing contained herein shall be construed or deemed to impose any duty or obligation upon the Company to obtain or maintain any specific forms, kinds or amounts of insurance for or on behalf of the Franchisee.
- 12.3 Disclaimer. Nothing contained herein shall be construed or considered an undertaking or representation by the Company that such insurance and bondings as may be required to be obtained by the Franchisee, or by the Company for the Franchisee, will insure the Franchisee against any or all insurable risks of loss which may or can arise out of or in connection with the operation of the Franchisee's Business.
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 insurance that conforms to Byrider's standards and limits, Byrider has the option, but not the obligation, to obtain the minimum required insurance coverage through agents and insurance companies of its choosing.
The franchisee is responsible for bearing the costs of this insurance and expressly agrees to promptly pay the required premiums or reimburse Byrider. However, the document clarifies that Byrider is not obligated to obtain or maintain any specific forms, kinds, or amounts of insurance on behalf of the franchisee.
Furthermore, the failure by the franchisee to purchase or maintain the required insurance, or to reimburse Byrider for purchasing it on their behalf, constitutes a material and incurable breach of the Franchise Agreement. Unless waived by Byrider, this breach entitles Byrider to terminate the agreement immediately upon notice to the franchisee. The franchisee does have the right to cure such default within ten days of notification from their insurance company that the insurance has lapsed.
This arrangement means that while Byrider can step in to ensure minimum coverage is in place, the franchisee ultimately bears the financial responsibility and risks potential termination for failing to maintain adequate insurance. Prospective franchisees should ensure they understand the required insurance standards and maintain open communication with Byrider regarding their coverage to avoid any breaches of the agreement.