Besides the policies required during the Initial Term, what other insurance must a Chatime franchisee maintain?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
From the date of this Agreement and at all times during the Initial Term (including, if appropriate, the New Term), Franchisee must at its cost take out and maintain in full force and effect the Insurance Policies with reputable insurers which comply with all Legal Requirements and on terms and conditions acceptable to Franchisor.
- (2) Franchisee must also maintain in force all other insurance of the types, in the amounts, and with such terms and conditions as Franchisor may from time to time reasonably prescribe, in the Operations Manual or otherwise.
- (3) The Insurance Policy must:
- (a) Name Franchisor and its Affiliates that it designates as ad
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, in addition to maintaining insurance policies during the Initial Term, franchisees must maintain other insurance types, amounts, terms, and conditions as Chatime may reasonably prescribe from time to time in the Operations Manual or otherwise. Franchisees are responsible for covering the costs of these insurance policies. Chatime retains the right to modify these insurance requirements, and franchisees must comply with any updated coverage standards.
This means that beyond the standard insurance required during the initial franchise term, Chatime has the flexibility to mandate additional insurance coverage as they deem necessary. These changes could be communicated through the Operations Manual or other official channels. Franchisees need to stay informed about any updates to the insurance requirements and be prepared to adjust their coverage accordingly.
Prospective Chatime franchisees should carefully review the Operations Manual and discuss insurance requirements with Chatime to fully understand the scope and potential costs of maintaining adequate insurance coverage throughout the term of the franchise agreement. Additionally, franchisees should confirm with their landlord what level of commercial general liability insurance is required under their lease.