Is the Franchisor obligated to procure insurance if the Crawlspace Medic franchisee fails to do so?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.3.
Failure to Procure.
If, for any reason, Franchisee should fail to procure or maintain the insurance required by this Agreement as revised from time to time for all franchisees by the Manual or otherwise in writing, Franchisor shall have the right and authority (without, however, any obligation) to immediately procure such insurance and to charge Franchisee for the cost thereof together with a reasonable fee for Franchisor's expenses in so acting, including all attorneys' fees.
Franchisee shall pay Franchisor immediately upon notice by Franchisor to Franchisee that Franchisor has undertaken such action and the cost thereof.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, while the franchisee is responsible for maintaining the required insurance, Crawlspace Medic has the right, but not the obligation, to procure insurance on behalf of the franchisee if the franchisee fails to do so.
If a Crawlspace Medic franchisee fails to maintain the required insurance, Crawlspace Medic has the authority to obtain the necessary insurance coverage. The franchisee is then responsible for covering the costs of the insurance, along with a reasonable fee to cover Crawlspace Medic's expenses, including attorney's fees, for securing the insurance.
The franchisee must pay Crawlspace Medic immediately after receiving notice of Crawlspace Medic's action and the associated costs. This ensures that the Crawlspace Medic franchise remains compliant with insurance requirements, even if the franchisee initially fails to maintain coverage. However, the ultimate responsibility for maintaining adequate insurance coverage lies with the franchisee.