What happens if a Crawlspace Medic franchisee fails to procure or maintain the required insurance?
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, if a franchisee fails to secure or maintain the required insurance, Crawlspace Medic has the right, but not the obligation, to procure the insurance themselves. The franchisee will then be charged for the cost of the insurance, along with a reasonable fee to cover Crawlspace Medic's expenses, including attorney's fees. The franchisee is required to pay Crawlspace Medic immediately upon receiving notice of this action and the associated costs.
Crawlspace Medic also reserves the right to increase the minimum insurance requirements or add additional types of insurance coverage as deemed necessary. Franchisees must provide proof of coverage meeting these new requirements within thirty days of notification. All insurance policies must name Crawlspace Medic and its affiliates, members, officers, agents, and employees as additional insureds. Public liability policies must include a provision allowing the additional insureds to recover under the policies for any loss caused by the franchisee or their staff, even though they are named as insureds.
This clause ensures that Crawlspace Medic can protect its brand and business interests even if a franchisee neglects their insurance obligations. The franchisee bears the full financial burden of this protection, including the cost of the insurance and any associated fees incurred by Crawlspace Medic. This is a fairly standard practice in franchising, as franchisors need to ensure consistent risk management across all franchise locations to protect the overall brand.