Is a Gokhale Method franchisee's insurance coverage requirement affected by the landlord's insurance requirements for the location where classes are conducted?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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 coverage.
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
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the insurance coverage a franchisee is required to maintain may be affected by the landlord's insurance requirements for the location where classes are conducted. While Gokhale Method specifies minimum insurance coverage amounts, the landlord for the location where a franchisee conducts classes may have additional insurance coverage requirements that apply. This means a franchisee must comply with both Gokhale Method's minimum requirements and any additional requirements imposed by the landlord.
The required insurance coverage includes commercial general liability with a General Aggregate Limit of $3,000,000 and a Personal Injury Limit of $1,000,000. Additionally, franchisees must maintain commercial or personal automobile liability 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 for these categories, they must obtain and maintain coverage as required by their state.
This dual requirement means that a Gokhale Method franchisee needs to carefully review the lease agreement and communicate with the landlord to understand all applicable insurance requirements. The franchisee will need to ensure that their insurance policies meet both the franchisor's minimum standards and the landlord's stipulations. Failure to comply with either set of requirements could result in a breach of the franchise agreement or the lease agreement.
Prospective franchisees should factor in potentially higher insurance costs when evaluating the financial feasibility of the Gokhale Method franchise. It would be prudent to obtain quotes for insurance coverage that meet both Gokhale Method's minimums and any likely landlord requirements to get an accurate estimate of this expense.