What happens if a Dog Haus franchisee fails to obtain the required insurance?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Avocado Association and $1,000 in rebates from McCain Foods, all of which were contributed to the Marketing, Creative & Technology Fund.
Insurance.
You must obtain and maintain throughout the term of your Franchise Agreement the types and amounts of insurance required by us and you must provide us with proof of coverage and Certificates of Insurance for all policies of insurance. You must obtain workers' compensation insurance with limits in compliance with your state law and employer's liability insurance with $1,000,000 combined single limit coverage, as well as any other insurance that may be required by statute or rule of the state in which your Franchised Restaurant is located or operated. Additionally, you must obtain: (i) comprehensive general liability insurance and product liability insurance with limits of $1,000,000 per occurrence and $2,000,000 aggregate coverage including t
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 31–36)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, franchisees must secure and maintain specific types and amounts of insurance throughout the term of their Franchise Agreement. They must also provide Dog Haus with proof of coverage and Certificates of Insurance for all policies. This includes workers' compensation insurance in compliance with state law, employer's liability insurance with $1,000,000 combined single limit coverage, and any other insurance required by the state in which the Franchised Restaurant is located.
Additionally, franchisees must obtain comprehensive general liability insurance and product liability insurance with limits of $1,000,000 per occurrence and $2,000,000 aggregate coverage. This coverage must include broad form contractual liability and personal injury coverage, insuring both Dog Haus and the franchisee against all claims, damages, etc. arising out of the operation of the Dog Haus restaurant.
The FDD excerpt does not explicitly state the consequences of failing to obtain or maintain the required insurance. Typically, franchise agreements allow the franchisor to take corrective actions if a franchisee breaches the agreement, which could include failing to maintain adequate insurance. These actions might range from issuing a notice of default and requiring the franchisee to cure the deficiency, to more severe measures such as terminating the franchise agreement if the breach is not remedied within a specified timeframe.
Prospective Dog Haus franchisees should clarify with Dog Haus what specific actions the franchisor can take if the franchisee fails to maintain the required insurance coverage. Understanding these potential consequences is crucial for assessing the risks associated with the franchise and ensuring compliance with the franchise agreement.