What are the potential consequences for a C12 Group franchisee who fails to maintain adequate insurance coverage, considering their obligations outlined in Item 9?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
must purchase and utilize all computer hardware, software, applications, and other means of technology as Franchisor may require from time to time.
- d. Certifications, Licenses, and Insurance. Franchisee must obtain and maintain appropriate certifications, licenses, registrations, and insurance coverage as necessary to conduct business locally and based on sound business judgment. Since Franchisee is not an agent, partner, or employee of Franchisor, Franchisee shall not cause Franchisor to incur any liability or undertake any obligations, and Franchisee shall bear the cost of defense of any financial or legal claims made against Franchisee. Franchisee shall be solely responsible for any debts Franchisee incurs in the operation of the Franchised Business.
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- Opening for Business.
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, franchisees must secure and maintain the necessary certifications, licenses, registrations, and insurance coverage to operate their business locally, based on sound business judgment. While C12 Group does not mandate specific insurance beyond what is legally required by the state, such as worker's compensation, franchisees are responsible for ensuring they have appropriate coverage.
Failure to maintain adequate insurance could expose a C12 Group franchisee to significant financial and legal risks. Since the franchisee operates as an independent entity and not as an agent, partner, or employee of C12 Group, they are solely responsible for any debts incurred and must bear the cost of defending against any financial or legal claims. This means that if a franchisee's inadequate insurance leads to uncovered liabilities, they alone are responsible for those costs, potentially jeopardizing their business and personal assets.
Prospective C12 Group franchisees should carefully assess the insurance requirements applicable to their specific location and business activities. Consulting with an insurance professional to determine the appropriate coverage levels is advisable. Franchisees should also understand that failure to maintain adequate insurance could be considered a breach of the franchise agreement, potentially leading to further penalties or even termination of the agreement.