What happens if a City Wide franchisee fails to maintain the required insurance coverage?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
You must maintain certain types of insurance coverage as outlined in the Franchise Agreement and Operating Manual. If you do not, CITY WIDE may immediately obtain or reinstate those required coverages on your behalf, and you must promptly reimburse CITY WIDE for the costs of obtaining such insurance coverage and any additional costs incurred by it in obtaining your coverage or reinstatement.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 29–36)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees are required to maintain specific types of insurance coverage as detailed in the Franchise Agreement and Operating Manual. If a franchisee fails to maintain the required insurance, City Wide has the right to immediately obtain or reinstate the necessary coverage on behalf of the franchisee.
The franchisee is then responsible for promptly reimbursing City Wide for all costs associated with obtaining or reinstating the insurance coverage. This includes not only the direct costs of the insurance itself but also any additional expenses that City Wide incurs in the process of securing or reinstating the coverage.
This policy ensures that all City Wide franchises maintain adequate insurance, protecting both the franchisee and the franchisor from potential liabilities. It also places the financial burden of non-compliance directly on the franchisee, incentivizing them to maintain the required insurance coverage independently. Franchisees should carefully review the insurance requirements outlined in the Franchise Agreement and Operating Manual to avoid incurring these additional costs.