If a Crave franchisee fails to maintain the required insurance, can Crave procure the insurance on their behalf, and what administrative fee applies?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.6 Should you, for any reason, fail to procure or maintain the insurance required by this Agreement, as such requirements may be revised from time to time by us in writing, we shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to you, which charges shall be payable by you immediately upon notice together with a ten percent (10%) administrative fee. The foregoing remedies shall be in addition to any other remedies we may have at law or in equity.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee fails to procure or maintain the required insurance, Crave has the right, but not the obligation, to procure the insurance on the franchisee's behalf. If Crave chooses to do so, the franchisee will be charged for the cost of the insurance, payable immediately upon notice.
In addition to the cost of the insurance, Crave will charge a ten percent (10%) administrative fee. This fee covers Crave's costs and efforts in securing the necessary insurance coverage for the franchisee.
This clause ensures that the Franchised Business remains adequately insured, protecting both the franchisee and Crave from potential liabilities. It is the franchisee's responsibility to maintain the required insurance, but Crave has the option to step in to ensure continuous coverage, albeit at an additional cost to the franchisee.