What kind of insurance coverage does Chem Dry require its vendors to maintain?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee covenants with CDI to (i) use and maintain the Equipment in a lawful manner and so as not to violate any law or regulation of the state, city or other political subdivisions in which Franchisee uses the Equipment; (ii) return, pay and file when due all taxes, fees and similar charges, including without limitation sales or use tax, and ad valorem and personal property taxes, imposed on the ownership, possession or use of the Equipment; (iii) keep the Equipment free and clear of all liens, security interests, claims and encumbrances except for those incurred through the initial financing of the Equipment from a vendor approved by CDI; (iv) obtain and maintain property insurance on the Equipment covering loss, damage, theft, vandalism and casualty; (v) maintain the Equipment per the manufacturer's maintenance, repair and replacement instructions; (vi) maintain in place any notices, labels or other indicia provided by CDI to indicate that the Equipment is subject to this Agreement; (vii) operate the Business as required under the Franchise Agreement; and (viii) notify CDI when any party claims any interest in the Equipment.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, franchisees are required to obtain and maintain property insurance on the equipment they lease from Chem Dry. This insurance must cover loss, damage, theft, vandalism, and casualty.
This requirement ensures that the franchisee is financially responsible for any potential harm or loss to the equipment used in their Chem Dry business. By maintaining property insurance, the franchisee protects themselves from incurring significant costs associated with repairing or replacing damaged or lost equipment. This also protects Chem Dry's assets.
Franchisees should carefully review the specific insurance requirements outlined in their Franchise Agreement to ensure they obtain adequate coverage. It is also important to understand the terms and conditions of the property insurance policy, including any exclusions or limitations that may apply. Franchisees should consult with an insurance professional to determine the appropriate level of coverage for their specific needs and circumstances.