What are the specific obligations of a Byrider franchisee regarding insurance (as implied by obligations in Item 9) and how does this relate to the estimated initial investment (Item 7)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
you.
You must purchase at your expense and maintain in effect at all times the greater of the insurance coverage by the landlord for the franchised location or the following categories of insurance coverage through licensed and admitted insurance companies acceptable to Byrider Franchising Partners:
- (i) Garage Liability Insurance: $1,000,000 limit per occurrence with products and completed operations coverage included. Coverage must also include $1,000,000 for Hired Autos and Non-Owned Autos liability. Coverage must also include a Broadened Garage endorsement for Personal and Advertising liability. You must insure Byrider Franchising Partners against all claims, suits, obligations, liabilities and damages, including attorneys' fees, based upon or arising out of the actual or alleged personal injuries or property damage resulting from or occurring in the course of, or on or about or otherwise relating to your Business or the Business Location. Byrider Franchising Partners may modify the required amounts from time to time to reflect inflation or further experience with claims.
- (ii) State Required Worker's Compensation and Employer's Liability Insurance: for all employees of your Business.
- (iii) Unemployment Insurance: for all employees of your Business.
- (iv) Truth-in-Lending Act Insurance: not less than $300,000.
- (v) All Risks Coverage Insurance: on the Business Location and all fixtures, equipment, supplies and other property used in the operation of your Business, for full repair and replacement value of the machinery, equipment, improvements and betterments, without any applicable co-insurance clause except that an appropriate deductible of no more than $50,000 shall be permitted.
- (vi) Cyber Liability Insurance: not less than $1,000,000 per occurrence.
Byrider Franchising Partners also recommends, but does not require, that you purchase an umbrella policy in the amount of $1,000,000 over and above all liability coverage.
It is further recommended that you carry vehicle Title Errors and Omissions Coverage, Federal Odometer Coverage, Equal Credit Opportunity Act and Deceptive Sales Practices Coverage in the amount of $1,000,000 for each policy.
For all required insurance coverage, you must: (a) name Byrider Franchising Partners and its designated affiliates as additional insureds; (b) ensure that each policy extends to and provides indemnity for all obligations assumed by you under the Franchise Agreement and all other items for which you are required to indemnify Byrider Franchising Partners under the Franchise Agreement; (c) ensure all such insurance coverage is primary to and non-contributory with respect to any other insurance purchased by Byrider Franchising Partners; and (d) provide, by endorsement, that Byrider Franchising Partners
is entitled to receive at least 30 days prior written notice of any intent to reduce policy limits, restrict coverage, cancel or otherwise alter or amend said policy.
ITEM 9
FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.
| Obligation | Section in agreement | Disclosure document item |
|---|---|---|
| a. Site selection and acquisition/lease | Sections 6.4 and 7.3 of franchise agreement | Items 7 and 11 |
| b. Pre-opening purchase/leases | Sections 7.2, 7.3 and 9.5 of franchise agreement | Item 7 |
| c. Site development and other pre-opening requirements | Sections 7.2, 7.4, 9.4, 9.5, and Exhibit E of franchise agreement | Item 11 |
| d. |
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, franchisees are obligated to maintain several types of insurance coverage. These include Garage Liability Insurance with a $1,000,000 limit per occurrence, including coverage for Hired Autos, Non-Owned Autos liability, and a Broadened Garage endorsement for Personal and Advertising liability. Franchisees must also secure State Required Worker's Compensation and Employer's Liability Insurance, Unemployment Insurance, Truth-in-Lending Act Insurance of not less than $300,000, All Risks Coverage Insurance for the business location and its contents, and Cyber Liability Insurance of not less than $1,000,000 per occurrence. Byrider also recommends franchisees purchase an umbrella policy in the amount of $1,000,000 over and above all liability coverage, as well as vehicle Title Errors and Omissions Coverage, Federal Odometer Coverage, Equal Credit Opportunity Act and Deceptive Sales Practices Coverage in the amount of $1,000,000 for each policy.
These insurance policies must name Byrider and its affiliates as additional insureds, extend to all obligations assumed by the franchisee, be primary to any other insurance purchased by Byrider, and provide Byrider with at least 30 days' written notice of any changes to the policy. Byrider retains the right to purchase the required insurance if the franchisee fails to do so, with the franchisee bearing the costs.
While Item 7 details the estimated initial investment for a Byrider franchise, it does not explicitly list the costs of these required insurance policies. The initial investment ranges from $17,500 to $87,500 for a Traditional Franchisee and $20,000 to $100,000 for an Ultra Franchisee, but these figures do not account for insurance premiums. A prospective franchisee should consider the cost of these insurance requirements, as they could significantly impact the overall initial investment and ongoing operating expenses. It is important to note that Byrider Franchising Partners may modify the required insurance amounts from time to time to reflect inflation or further experience with claims.
Prospective franchisees should carefully review the insurance requirements with Byrider and obtain quotes from insurance providers to accurately estimate these costs. Understanding the full scope of insurance obligations is crucial for assessing the financial feasibility of a Byrider franchise.