If Checkersrallys obtains insurance coverage on behalf of a franchisee, is the Checkersrallys franchisee required to cooperate and pay the costs and premiums incurred by Checkersrallys?
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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a franchisee fails to maintain the required insurance coverage, Checkersrallys has the option to obtain the insurance coverage on behalf of the franchisee. If Checkersrallys exercises this option, the franchisee is obligated to fully cooperate with Checkersrallys in obtaining the insurance policies.
Furthermore, the franchisee is responsible for paying Checkersrallys for all costs and premiums incurred in obtaining the insurance coverage. This means that the franchisee will have to reimburse Checkersrallys for the expenses related to securing the necessary insurance.
This requirement ensures that Checkersrallys franchisees maintain adequate insurance coverage, and it protects Checkersrallys's interests by allowing them to secure coverage if a franchisee fails to do so. The franchisee bears the financial responsibility for this coverage, even if Checkersrallys has to step in to obtain it.