How much written notice must an Exit franchisee's insurance agency provide to Exit and the Subfranchisor before canceling an insurance policy?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the franchisee's insurance agency must provide written notice to both Exit and the Subfranchisor at least ten days before canceling the insurance policy. This requirement ensures that Exit and the Subfranchisor are promptly informed of any potential lapse in coverage, allowing them time to ensure continuous coverage.
Exit requires franchisees to maintain specific insurance coverage, including general public liability insurance and errors and omissions insurance, each 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.
The ten-day notice period is designed to give Exit and the Subfranchisor sufficient time to verify that the franchisee obtains replacement coverage, thereby protecting the brand and the business from potential liabilities. This requirement is a standard practice in franchising to mitigate risks associated with inadequate insurance coverage.