Is a Gokhale Method franchisee required to purchase insurance from any particular source?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
surance
You must maintain in force commercial general liability insurance protecting you, us, and the parties' respective officers, directors, partners, agents and employees against any demand or claim with respect to personal injury, death or property damage, business interruption, or any loss, liability or expense whatsoever arising or occurring upon or in connection with the Franchised Business, including, but not limited to, comprehensive general liability insurance, property insurance (including, but not limited to, fire, vandalism, and malicious mischief insurance for the replacement value of the Franchised Business and its contents), casualty insurance, business interruption insurance, statutory workers' compensation insurance, and automobile insurance coverage for all vehicles used in connection with the operation of the Franchised Business. All insurance policies must: (1) be issued by carriers approved by us; (2) contain the types and minimum amounts of coverage, exclusions and maximum deductibles as we prescribe periodically; (3) name us and our Affiliates as additional insureds; (4) provide for 30 days' prior written notice to us of any material modification, cancellation or expiration of such policy; and (5) include such other provisions as we may require periodically. We do not require you to purchase insurance from any particular source.
Identified below are the types and minimum coverage amounts that currently we require for each franchised Gokhale Method business. If your state requires greater coverage amounts for the categories listed below, you must obtain and maintain coverage as required by your state.
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit: $3,000,000 Personal Injury Limit: $1,000,000
COMMERCIAL OR PERSONAL AUTOMOBILE LIABILITY:
Bodily Injury and Property Damage Combined Single Limit: $1,000,000 Hired and Non-Owned Liability Limit: $1,000,000
Please note, the landlord for the location where you conduct your classes may have its own insurance coverage requirements that apply additionally to our requirements for insurance c
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, franchisees are not required to purchase insurance from any particular source. However, Gokhale Method mandates that franchisees maintain certain types and minimum amounts of insurance coverage. These include commercial general liability insurance with a General Aggregate Limit of $3,000,000 and a Personal Injury Limit of $1,000,000, as well as commercial or personal automobile liability insurance with a Bodily Injury and Property Damage Combined Single Limit of $1,000,000 and a Hired and Non-Owned Liability Limit of $1,000,000. If a franchisee's state requires greater coverage amounts, they must adhere to those state requirements.
The required insurance policies must be issued by carriers approved by Gokhale Method and must contain the types and minimum amounts of coverage, exclusions, and maximum deductibles as prescribed by Gokhale Method periodically. Additionally, the policies must name Gokhale Method and its affiliates as additional insureds and provide for 30 days' prior written notice to Gokhale Method of any material modification, cancellation, or expiration of the policy. The policies must also include any other provisions that Gokhale Method may require periodically.
It is also important to note that the landlord of the location where classes are conducted may have their own insurance coverage requirements that apply in addition to Gokhale Method's requirements. Therefore, franchisees need to ensure they meet both the franchisor's and the landlord's insurance criteria. This is a fairly standard practice in franchising, where franchisors set minimum insurance standards to protect the brand and the network, while landlords protect their properties.