What procedures must I follow for maintaining insurance certificates for my Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
its real estate service, 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, franchisees are required to maintain specific insurance coverage. This includes general public liability insurance and errors and omissions insurance, each with a general aggregate limit of not less than $1,000,000. Exit also has the right to require additional insurance amounts and forms if deemed prudent, provided such insurance is customary for similar businesses.
To ensure compliance, Exit franchisees must direct their insurance agency to send copies of all insurance policies directly to both Exit and the Subfranchisor. These policies must include Exit and its officers and directors as named insureds. Furthermore, the policies must stipulate that they cannot be canceled without providing ten days' written notice to Exit and the Subfranchisor.
Prior to commencing business operations under the Franchise Agreement, Exit franchisees must ensure that their insurance agency delivers certificates of insurance to Exit and the Subfranchisor, evidencing that the required insurance is in full force and effect. These certificates must also name the Subfranchisor and Exit as additional insureds. Compliance with these insurance requirements is essential for maintaining the franchise and protecting both the franchisee and Exit from potential liabilities.