What are the specific obligations of a Dq Treat franchisee regarding insurance (Item 9)?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
ainst any and all claims, demands, damages, and liabilities of any nature whatsoever arising in any manner, directly or indirectly, out of or in connection with or incidental to the Restaurant (regardless of cause or any concurrent or contributing fault or negligence of Company) or any breach or failure to comply with this agreement.
10.3 Insurance.
- (A) Licensee must purchase and maintain at its own expense liability insurance at a minimum limit of liability designated periodically by Company, but not less than $2,000,000 per occurrence, or a higher amount that Company may in the future require of similarly situated franchisees or that a lessor of the Restaurant premises may require. The insurance coverage must start on the earlier of the date Licensee takes possession of the Authorized Location or the date Licensee begins operating the Restaurant, and continue through the later of the Expiration Date or the date the Restaurant closes. Licensee must annually, or any shorter period of time at Company's request, deliver to Company a certificate of insurance and additional insured and other endorsements showing compliance with this section 10.3. The insurance coverage must:
- (1) Insure Licensee, Company, Company's affiliates and any other person or entity designated by Company by name from liability for any and all such damage and injury;
- (2) Be written with a company rated no less than "A" by AM Best Insurance Rating;
- (3) Name International Dairy Queen, Inc. and its affiliates as an additional insured; and
- (4) Provide that Company will be given 30 days' prior written notice of material change in or termination or cancellation of the policy.
- (B) Licensee must purchase and maintain workers' compensation insurance and all additional insurance that may be required by law or other agreement related to the Restaurant.
- (C) If Licensee does not procure and maintain the required insurance coverage, Company may procure insurance coverage for Licensee and charge the cost to Licensee, together with a reasonable fee for Company's expenses in doing so, payable by Licensee immediately upon notice.
- (D) Licensee's obligation to obtain and maintain these insurance policies in the amounts specified is not limited in any way by rea
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, franchisees have specific obligations regarding insurance. Item 9 provides a table that lists the franchisee's principal obligations under the franchise and other agreements, and indicates where to find more detailed information in the document. Under this item, franchisees are obligated to maintain insurance as detailed in Section 10.3 of the Franchise Agreement, and further discussed in Items 5, 6, and 8 of the disclosure document.
Specifically, Dq Treat franchisees must purchase and maintain liability insurance at their own expense, with a minimum limit of $2,000,000 per occurrence, or a higher amount if required by the company or the lessor of the restaurant premises. This insurance coverage must begin when the franchisee takes possession of the location or begins operating the restaurant, and continue through the expiration date or the date the restaurant closes. Franchisees must provide annual certificates of insurance to Dq Treat, demonstrating compliance with these requirements. The insurance policy must insure the franchisee, Dq Treat, its affiliates, and any other designated entities against liability for damage and injury, be written by a company rated no less than "A" by AM Best Insurance Rating, name International Dairy Queen, Inc. and its affiliates as additional insured, and provide Dq Treat with 30 days' prior written notice of any material changes or termination of the policy.
In addition to liability insurance, Dq Treat franchisees must also purchase and maintain workers' compensation insurance and any other insurance required by law or other agreements related to the restaurant. If a franchisee fails to maintain the required insurance coverage, Dq Treat has the right to procure insurance on the franchisee's behalf and charge the franchisee for the cost, along with a reasonable fee for expenses. The franchisee's obligation to obtain and maintain insurance is separate from their indemnity obligations under the agreement.
Dq Treat also has arranged with a third party insurer to make certain insurance, including liability insurance, available to qualifying franchisees.
Prospective franchisees should carefully review Section 10.3 of the Franchise Agreement and Items 5, 6, and 8 of the disclosure document to fully understand the specific insurance requirements and ensure they can meet these obligations. Failure to maintain adequate insurance coverage could result in Dq Treat procuring insurance on the franchisee's behalf at the franchisee's expense, or potentially lead to a breach of the franchise agreement.