Must a Checkers franchisee provide Checkers with prior written notice of any material modification, cancellation, or expiration of their insurance policy, and if so, how many days' notice is required?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies must: (1) be issued by carriers we approve with an A.M. Best Rating of not less than A VII; (2) contain such types and minimum amounts of coverage,
exclusions and maximum deductibles as we prescribe from time to time; (3) name us and our affiliates as additional insured; (4) provide for 30 days' prior written notice to us of any material modification, cancellation or expiration of such policy; (5) provide a waiver of subrogation in favor of us and our affiliates; and (6) include such other provisions as we may require.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers franchisees must ensure that all insurance policies provide for 30 days' prior written notice to Checkers of any material modification, cancellation, or expiration of the policy. This requirement is part of the broader set of conditions Checkers imposes on the franchisee's insurance coverage.
This stipulation ensures that Checkers is promptly informed of any changes to the franchisee's insurance coverage, allowing them to take necessary steps to protect their interests and ensure continuous compliance with the franchise agreement. The 30-day notice period provides Checkers with sufficient time to assess the impact of the modification, cancellation, or expiration and to ensure that the franchisee obtains replacement coverage if necessary.
For a prospective Checkers franchisee, this means they need to maintain open communication with their insurance provider and diligently track policy changes and expiration dates. They must also establish internal procedures to ensure that Checkers receives the required 30-day written notice for any material changes to their insurance coverage. Failure to comply with this requirement could potentially lead to a breach of the franchise agreement and possible penalties.
This type of requirement is fairly standard in franchising, as franchisors need to protect their brand and ensure all franchisees maintain adequate insurance coverage. Franchisees should factor in the administrative burden of managing insurance policies and providing timely notifications to the franchisor when evaluating the overall costs and obligations of the franchise.