What is the consequence if the Floors To Go franchisee does not carry sufficient insurance?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to maintain sufficient working capital to pay all obligations incurred which relate to your Showroom when the same are due.
Failure to pay such obligations when due could constitute an event of default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, franchisees must maintain sufficient working capital to cover all obligations related to their showroom when they are due. Failure to meet these obligations, including insurance, could lead to a default under the Franchise Agreement.
Maintaining adequate insurance is a standard requirement in franchising to protect both the franchisee and franchisor from potential liabilities and financial losses. Floors To Go franchisees should ensure they understand the specific insurance requirements outlined in their Franchise Agreement and maintain sufficient coverage to avoid potential default.
Prospective Floors To Go franchisees should carefully review the insurance requirements detailed in the Franchise Agreement and consult with an insurance professional to ensure they obtain adequate coverage. Understanding the potential consequences of failing to maintain sufficient insurance is crucial for the long-term success and stability of the franchise.