If Counselor Realty buys insurance for a franchisee, what is the timeframe for the Counselor Realty franchisee to reimburse Counselor Realty?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
Business and any change in the Franchisee's organizational documents.
- 8.2 Insurance. You must maintain types and levels of insurance coverage required by the state in which you operate your Business. You also must maintain other insurance required by law, and by your Office (including any Additional Office and Extension Office) lease or mortgage, and errors and omissions insurance coverage. You must maintain general liability insurance on an occurrence basis with a minimum limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate, and errors and omission insurance with a minimum limit of at least $1,000,000. Insurance shall be with insurers and on forms acceptable to us, shall name Counselor as an additional insured, and waive subrogation. If we buy such insurance because you fail to do so (which we may, but ar
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, franchisees must maintain specific types and levels of insurance coverage as required by the state in which they operate their business, along with any other insurance required by law or by their office lease or mortgage, including errors and omissions insurance. The franchisee is required to maintain general liability insurance on an occurrence basis with a minimum limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate, and errors and omission insurance with a minimum limit of at least $1,000,000.
If a Counselor Realty franchisee fails to maintain the required insurance, Counselor Realty has the option, but not the obligation, to purchase the insurance coverage. Should Counselor Realty choose to buy insurance on behalf of the franchisee, the franchisee is obligated to reimburse Counselor Realty immediately upon request.
This means that a Counselor Realty franchisee needs to be prepared to provide immediate reimbursement to Counselor Realty if they fail to maintain their insurance and Counselor Realty steps in to secure coverage. This immediate reimbursement requirement could place a significant financial strain on the franchisee if they are not prepared for this contingency.