If City Wide obtains insurance coverage on behalf of a franchisee, is the franchisee responsible for reimbursing City Wide for the costs?
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 responsible for maintaining specific types of insurance coverage as outlined in the Franchise Agreement and Operating Manual. If a franchisee fails to maintain the required insurance, City Wide has the right to obtain or reinstate the necessary coverage on the franchisee's behalf.
In the event that City Wide secures insurance coverage for a franchisee, the franchisee is obligated to promptly reimburse City Wide for all associated costs. This reimbursement includes not only the direct costs of obtaining the insurance coverage but also any additional expenses incurred by City Wide in the process of securing or reinstating the coverage.
This policy ensures that all City Wide franchises maintain the necessary insurance levels to protect the brand and its customers. It also places the financial responsibility for insurance squarely on the franchisee, even if City Wide must intervene to secure the coverage. Prospective franchisees should carefully review the insurance requirements in the Franchise Agreement and Operating Manual to understand their obligations and budget accordingly.