Under what circumstances can the Byrider company purchase insurance on behalf of the franchisee?
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.
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.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider has the option to purchase insurance on behalf of a franchisee if the franchisee fails to obtain the required insurance coverage that meets Byrider's standards and limits. Byrider can choose the agents and insurance companies to use for this purpose.
The franchisee is responsible for covering the costs of this insurance. The franchisee agrees to promptly pay the premiums or reimburse Byrider for the insurance expenses.
It is important to note that Byrider is not obligated to obtain or maintain any specific insurance for the franchisee. However, if the franchisee fails to purchase or maintain the required insurance or fails to reimburse Byrider for insurance purchased on their behalf, it constitutes a significant breach of the franchise agreement. This breach could allow Byrider to terminate the agreement immediately, unless Byrider waives this right or the franchisee cures the default within ten days of notification from their insurance company that the insurance has lapsed.