What is the consequence if a Chocolate Fish Coffee franchisee fails to provide Certificates of Insurance?

According to the 2024 Franchise Disclosure Document, Chocolate Fish Coffee franchisees must obtain and maintain specific insurance policies, including coverage for property loss, business interruption, commercial general liability ($1,000,000 single limit per occurrence and $2,000,000 aggregate limit), business automobile liability ($1,000,000), and workers' compensation. These policies, with the exception of Workers Compensation, must list Chocolate Fish Franchising and its affiliates as additional insured, include a waiver of subrogation, be primary and non-contributing with any insurance carried by Chocolate Fish Franchising, and stipulate that Chocolate Fish Franchising receives 30 days' prior written notice of cancellation.

Chocolate Fish Coffee requires franchisees to provide Certificates of Insurance as evidence of the required coverage prior to opening, upon annual renewal, and at any time upon request. The FDD does not explicitly state the consequences of failing to provide these certificates.

Because the consequences of failing to provide Certificates of Insurance are not described in the FDD, prospective Chocolate Fish Coffee franchisees should ask the franchisor about the specific repercussions of non-compliance. Understanding these potential consequences is crucial for maintaining a good standing with the franchisor and avoiding potential breaches of the franchise agreement.