If Byrider purchases insurance for the franchisee, who is responsible for paying the insurance premiums?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, if a franchisee fails to purchase the required insurance, Byrider has the right to obtain the minimum required insurance coverage through its own agents and insurance companies. In this case, the franchisee is responsible for paying the insurance premiums.
Specifically, the franchisee expressly agrees to promptly pay the required premiums or reimburse Byrider for the insurance costs. Failure to either purchase the required insurance or reimburse Byrider for insurance purchased on the franchisee's behalf constitutes a material breach of the franchise agreement.
This breach can lead to the immediate termination of the agreement, unless Byrider waives the breach. However, the franchisee has the right to cure the default within ten days of notification from their insurance company that the insurance has lapsed. This provision ensures that Byrider franchisees maintain the necessary insurance coverage, protecting both the franchisee and Byrider from potential liabilities, while also ensuring the franchisee bears the financial responsibility for this coverage.