Does the insurance coverage required for Focalpoint Coaching franchisees extend to their indemnification obligations to the franchisor?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
These insurance policies must name Franchisor, any affiliates Franchisor designates and the Indemnified Parties (as identified in Subsection 16.D below) as additional named insureds for claims arising from the Franchised Business' operation and provide for thirty (30) days' prior written notice to Franchisor of a policy's material modification, cancellation or expiration. These insurance policies must be primary to and without right of contribution from any other insurance policy purchased by Franchisor or any other Indemnified Party; must not limit or reduce coverage for Franchisee if there is a claim by Franchisor or any one or more of the other Indemnified Parties; and must extend to and provide indemnity for all of Franchisee's indemnification obligations to Franchisor and the other Indemnified Parties under this Agreement. Franchisee agrees not to reduce the policy limits, restrict coverage, cancel or otherwise alter or amend Franchisee's insurance policies without Franchisor's prior written consent. If there is a claim by Franchisor or any one or more of the other Indemnified Parties against Franchisee, Franchisee must, upon Franchisor's request, assign to Franchisor all rights which Franchisee then has or thereafter may have with respect to the claim against the insurer(s) providing the coverages described above.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the insurance policies that franchisees are required to maintain must extend to cover their indemnification obligations to Focalpoint Coaching and other indemnified parties. This means that the insurance coverage should provide protection and indemnity for any liabilities the franchisee assumes under the franchise agreement, specifically those related to indemnification.
Furthermore, the insurance policies must name Focalpoint Coaching, its affiliates, and the Indemnified Parties as additional insureds for claims arising from the operation of the franchised business. These policies must also provide for thirty days' prior written notice to Focalpoint Coaching in case of material modification, cancellation, or expiration. The franchisee's insurance should be primary and without the right of contribution from any other insurance policy purchased by Focalpoint Coaching or any other Indemnified Party.
In the event of a claim by Focalpoint Coaching or other Indemnified Parties against the franchisee, the franchisee is obligated to assign all rights related to the claim against their insurer to Focalpoint Coaching upon request. The franchisee is prohibited from reducing policy limits, restricting coverage, or canceling the insurance policies without prior written consent from Focalpoint Coaching. These stipulations ensure that Focalpoint Coaching has sufficient protection against potential liabilities arising from the franchisee's business operations.