What are the consequences if a Cinch I.T. franchisee fails to maintain insurance?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
onths 25-60 | $1,000 |
| TYPE OF FEE1 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| exclusive supplier for certain products. Frequency of purchase is based on Client demand. | |||
| Helpdesk Client Managed Services Fees | Monthly Fees range between $5 and $90 based on service provided, number of users and equipment supported. | 15th day of each month or other day of the month we periodically designate by EFT | Payable to us or our designee, Cinch HD. We reserve the right to adjust this fee as further described in Note 4 below. |
| Product Testing Fee | The greater of $500 or the actual cost of our review and/or inspection, including the actual cost of laboratory fees, professional fees and travel and living expenses as well as any other fees we pay to third parties. | When billed | |
| Failure to Maintain Insurance | Cost of insurance and, if not obtained by you, our procurement expense. | As required and as incurred | Payable upon your failure to comply with the Franchise Agreement. |
| Annual Conference Registration Fee | Up to $700 per person | On demand | You must pay us a registration fee, which we expect will not be more than $700 per person, for attending our annual conference. We require you (or your Operating Principal), and/or your general manager to attend each conference. You will be responsible for all travel and living expenses incurred by you and your personnel for attendance at the annual conference. |
| Client Complaints | Reimbursement of our time and expenses plus any compensation paid | As incurred | If we step in to |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, if a franchisee fails to maintain the required insurance, Cinch I.T. has the right to procure the insurance themselves. The franchisee is then responsible for covering the cost of the insurance and Cinch I.T.'s expenses for obtaining it.
This means that a Cinch I.T. franchisee must ensure they maintain adequate and up-to-date insurance coverage as mandated by the franchise agreement. Failure to do so not only constitutes a breach of the agreement but also exposes the franchisee to additional financial burdens.
The franchisee will be responsible for reimbursing Cinch I.T. for the insurance costs and any procurement expenses Cinch I.T. incurs. This could potentially include administrative fees, time spent by Cinch I.T. personnel, and other related costs. This policy ensures that the franchisor can protect its brand and interests, while also placing the financial responsibility for compliance on the franchisee.