Who is responsible for the cost and expense of procuring and maintaining the required insurance policies for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
chisor, Franchisee shall deliver to Franchisor a copy of the insurance policy or policies required hereunder.
- 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 an administrative fee of ten percent (10%) 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.
- 15.4 Increase in Coverage**.** The levels and types of insurance stated herein are minimum requirements. Franchisor reserves the right to raise the required minimum requirements for any type of insurance or add additional types of insurance requirements as Franchisor deems reasonably prudent to require. Within thirty (30) days of any such required new limits or types of coverage, Franchisee must submit proof to Franchisor of Franchisee's coverage pursuant to Franchisor's requirements.
- 15.5 Additional Insured. All required insurance policies shall name Franchisor, Licensor and their affiliates and their members, officers, agents and employees as additional insureds as their interests may appear. All public liability policies shall contain a provision that the additional insureds, although named as insureds, shall nevertheless be entitled to recover under such policies on any loss caused by Franchisee or Franchisee's servants, agents or employees.
- 15.6 Indemnification.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the franchisee is responsible for the cost and expense of procuring and maintaining the required insurance policies.
Specifically, if a Devon Creek franchisee fails to procure or maintain the required insurance, Devon Creek has the right to procure such insurance and charge the franchisee for the cost, along with a 10% administrative fee and attorney's fees. The franchisee must provide Devon Creek with current Certificates of Insurance as evidence of coverage and, if requested, copies of the insurance policies.
The required insurance coverage must include owned, non-owned, and hired autos, and business interruption insurance providing at least twelve months of loss of income, including coverage for the franchisor's Royalty Fees and Brand Development Fund Contribution. All required insurance policies must name Devon Creek, its licensor, affiliates, members, officers, agents, and employees as additional insureds. All public liability policies shall contain a provision that the additional insureds, although named as insureds, shall nevertheless be entitled to recover under such policies on any loss caused by Franchisee or Franchisee's servants, agents or employees.
Devon Creek also reserves the right to increase the required minimum requirements for any type of insurance or add additional types of insurance requirements as Devon Creek deems reasonably prudent to require. The franchisee must submit proof of coverage pursuant to Devon Creek's requirements within 30 days of any such required new limits or types of coverage.