Under what circumstances might Closet Storage Concepts obtain insurance for a franchisee?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
| Insurance | Cost of Insurance | Upon invoice | We may obtain the insurance if you fail to. You will pay the cost of the insurance premiums and a fee for our reasonable expenses. |
|---|---|---|---|
| Cost of Review (up to $500) | Upon invoice | If we designate a preferred insurance agent and you choose to use your own agent, your policy is subject to the review and approval of our designated agent and you must pay for the cost of that review. |
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Closet Storage Concepts's 2025 Franchise Disclosure Document, under certain circumstances, Closet Storage Concepts may obtain insurance on behalf of a franchisee. Specifically, if the franchisee fails to obtain the required insurance, Closet Storage Concepts reserves the right to secure the necessary coverage.
In such instances, the franchisee is responsible for covering the cost of the insurance premiums. Additionally, Closet Storage Concepts will charge a fee to cover their reasonable expenses incurred in obtaining the insurance. This ensures that the franchise location remains compliant with insurance requirements, protecting both the franchisee and Closet Storage Concepts from potential liabilities.
Furthermore, if Closet Storage Concepts designates a preferred insurance agent, and a franchisee chooses to use their own agent, the franchisee's policy is subject to review and approval by Closet Storage Concepts's designated agent. The franchisee is responsible for paying the cost of this review. This process allows Closet Storage Concepts to ensure that all insurance policies meet their minimum standards, regardless of the agent used by the franchisee.