If a Checkersrallys franchisee fails to maintain required insurance coverage, can Checkersrallys obtain insurance on the franchisee's behalf?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
At our request, you must furnish us with such evidence of insurance coverage and payment of premiums as we require. If you fail or refuse to maintain any required insurance coverage, or to furnish satisfactory evidence thereof, we, at our option and in addition to our other rights and remedies hereunder, may obtain such insurance coverage on your behalf. If we do so, you must fully cooperate with us in our effort to obtain such insurance policies and pay us any costs and premiums we incur.
Your obligation to maintain insurance coverage is not diminished in any manner by reason of any separate insurance we may choose to maintain, nor does it relieve you of your obligations under Section 17.02.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys has the option to obtain insurance coverage on behalf of a franchisee if the franchisee fails to maintain the required coverage.
Specifically, Checkersrallys can obtain the necessary insurance if the franchisee fails or refuses to maintain the required insurance or provide satisfactory evidence of coverage. If Checkersrallys exercises this option, the franchisee is obligated to fully cooperate in obtaining the insurance policies and must pay Checkersrallys for all costs and premiums incurred.
This provision ensures that the franchised business remains protected even if the franchisee lapses on their insurance obligations. However, the franchisee's responsibility to maintain adequate insurance coverage is not reduced or eliminated by any separate insurance that Checkersrallys may choose to maintain. The franchisee remains responsible for fulfilling their insurance obligations as outlined in Section 17.02 of the franchise agreement.