Before conducting business under the Franchise Agreement, what must an Exit franchisee cause its insurance agency to deliver?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
vice, and shall defend, indemnify and hold EXIT and Subfranchisor harmless from any and all claims, liability or expenses, including attorneys' fees, which EXIT or Subfranchisor may incur as a result of the conduct of Franchisee's business.
9.7. Insurance
- (A) Franchisee shall maintain and keep in force, at its expense, such forms of insurance, including, but not limited to, general public liability insurance against claims for personal injury, death, or property damage with a general aggregate limit of not less than $1,000,000, errors and omissions insurance with a general aggregate limit of not less than $1,000,000 with such approved insurance companies as Subfranchisor and EXIT reasonably shall require. Franchisee shall carry such additional amounts and forms of insurance which Subfranchisor shall reasonably deem prudent for a Franchisee to carry, should the circumstances or conditions so merit Franchisee carrying such amount and type of insurance, and provided such insurance is then customarily required and maintained by similar businesses. Franchisee shall cause its insurance agency to send directly to EXIT and Subfranchisor, copies of all such polices which shall include EXIT and Subfranchisor and all of their officers and directors as named insureds and such policies shall not be canceled except on ten (10) days written notice to EXIT and Subfranchisor. Franchisee shall, prior to conducting
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, before conducting business under the Franchise Agreement, an Exit franchisee must ensure their insurance agency delivers certificates of insurance directly to Exit and the Subfranchisor. These certificates must provide evidence that the required insurance is in full force and effect.
The required insurance includes general public liability insurance against claims for personal injury, death, or property damage with a general aggregate limit of not less than $1,000,000, and errors and omissions insurance with a general aggregate limit of not less than $1,000,000. These policies must name Exit and the Subfranchisor, along with their officers and directors, as named insureds.
Furthermore, the insurance policies must stipulate that they cannot be canceled without providing ten days' written notice to both Exit and the Subfranchisor. This requirement ensures that Exit and the Subfranchisor are protected and informed about the franchisee's insurance coverage, mitigating potential risks associated with the franchisee's operations. The franchisee is also responsible for maintaining any additional insurance amounts or forms that the Subfranchisor deems prudent, provided such insurance is customarily required and maintained by similar businesses.