Is Focus Cfo required to provide business insurance coverage to the franchisee?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
10. LIABILITY INSURANCE; INDEMNIFICATION
- 10.1.
Business Insurance Coverage.
Focus CFO will provide Franchisee with reasonable business insurance coverage (general liability, crime, and employment practices), subject to standard limitations and indemnification provisions for a professional service business and Franchisee's ongoing compliance with Focus CFO's policies and standard operating procedures.
Franchisee acknowledges and agrees that Focus CFO does not represent or warrant that such insurance coverage is adequate to protect Franchisee and nothing in this Agreement restricts Franchisee from obtaining its own insurance.
This business insurance coverage extends only to the Area President of the Franchisee's business entity.
It does not extend to other Support Resources of the Franchisee's business entity.
Franchisee shall be responsible for ensuring it has all appropriate insurance in place to cover the services performed by all Support Resources of Franchisee.
Focus CFO may provide Franchisee with, in writing, minimum insurance requirements for Support Resources of Franchisee that Franchisee must follow.
Focus CFO shall be named as an additional insured on the Franchisee's insurance policy.
- 10.2.
Business Insurance Renewal.
As part the annual renewal process of the Business Insurance Coverage set forth in Section 10.1, Franchisee is required to sign an annual statement prior to the annual renewal each year certifying that Franchisee is in compliance with Focus CFO's policies and procedures and disclosing any known circumstances that could result in a legal claim against Focus CFO, which could then lead to a potential insurance claim.
Franchisee will comply with this requirement within thirty (30) days of Focus CFO's request each year.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to Focus Cfo's 2025 Franchise Disclosure Document, Focus CFO will provide the franchisee with reasonable business insurance coverage. This coverage includes general liability, crime, and employment practices insurance. However, this is subject to standard limitations and indemnification provisions typical for a professional service business. The franchisee must also comply with Focus CFO's policies and standard operating procedures to maintain this coverage.
It is important to note that this business insurance coverage extends only to the Area President of the franchisee's business entity and does not cover other support resources the franchisee may hire. The franchisee is responsible for ensuring they have appropriate insurance to cover the services performed by any support resources they employ. Focus CFO may also provide the franchisee with written minimum insurance requirements for these support resources, which the franchisee must follow.
While Focus CFO provides this business insurance, the document clarifies that Focus CFO does not warrant that this coverage is adequate to fully protect the franchisee. The franchisee is not restricted from obtaining their own additional insurance coverage if they deem it necessary. Franchisees are also required to sign an annual statement certifying their compliance with Focus CFO's policies and disclosing any circumstances that could lead to a legal claim against Focus CFO, which could potentially lead to an insurance claim.