Under what conditions can Caring Transitions increase the minimum insurance coverage required for franchisees?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor, upon not less than thirty (30) days written notice to Franchisee, may reasonably increase the minimum coverage for any insurance required hereunder, decrease the maximum deductible, or require different or additional kinds of insurance coverage to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, Caring Transitions can increase the minimum insurance coverage required for franchisees under specific circumstances. Caring Transitions must provide at least thirty days written notice to the franchisee before increasing the minimum coverage.
The reasons for increasing coverage include factors such as inflation, changes in liability standards, higher damage awards, or other relevant changes in circumstances. This clause allows Caring Transitions to adjust insurance requirements to keep pace with economic and legal changes that could impact the financial risks associated with operating a franchise.
This provision is fairly standard in franchise agreements, as it protects both the franchisor and franchisees from unforeseen liabilities. Franchisees should understand that insurance costs may increase over time due to these factors and should factor this potential increase into their financial planning. It is also important to maintain open communication with Caring Transitions regarding any concerns about insurance coverage or costs.