If City Wide procures insurance on behalf of a franchisee, what charges can the franchisee expect?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.4 Should Franchisee, for any reason, not procure and maintain such insurance coverage as required by this Agreement, CITY WIDE will have the right and authority (without, however, any obligation to do so) immediately to procure such insurance coverage and to charge Franchisee for such coverage, which charges, together with a reasonable fee for expenses incurred by CITY WIDE in connection with such procurement, will be payable by Franchisee immediately upon notice.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees are required to maintain specific insurance policies. If a franchisee fails to procure and maintain the required insurance coverage, City Wide has the right, but not the obligation, to procure the insurance coverage themselves.
In the event that City Wide procures insurance on behalf of the franchisee, the franchisee will be charged for the cost of the insurance coverage. In addition to the cost of the insurance itself, City Wide will also charge the franchisee a reasonable fee to cover any expenses incurred by City Wide in connection with procuring the insurance.
The franchisee is responsible for paying these charges immediately upon receiving notice from City Wide. This ensures that the necessary insurance coverage is in place to protect both the franchisee and City Wide from potential liabilities and financial losses associated with the operation of the franchised business.