When must a Hck Hot Chicken franchisee provide proof of insurance coverage to the Franchisor?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.3 Proof of Insurance. Franchisee shall, prior to opening the Franchised Restaurant, (and from time to time, within 10 days after a request therefor from Franchisor, and annually thereafter provide evidence of the renewal or extension of each insurance policy) file with Franchisor, certificates of such insurance and shall promptly pay all premiums on the policies as they become due. In addition, the policies shall contain a provision requiring 30 days prior written notice to Franchisor of any proposed cancellation, modification, or termination of insurance. If Franchisee fails to obtain and maintain the required insurance, Franchisor may, at its option, in addition to any other rights it may have, procure such insurance for Franchisee without notice and Franchisee shall pay, upon demand, the premiums plus twenty percent (20%) of the premium for Franchisor's administrative costs in taking such action.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, a franchisee must provide proof of insurance coverage to the franchisor at three specific times. First, the franchisee must provide proof of insurance prior to opening the franchised restaurant. Second, the franchisee must provide proof of insurance from time to time, within 10 days after a request from Hck Hot Chicken. Finally, the franchisee must provide evidence of the renewal or extension of each insurance policy annually.
This requirement ensures that Hck Hot Chicken franchisees maintain adequate insurance coverage throughout the term of their franchise agreement. The insurance coverage must be in the types and amounts specified in the Hck Hot Chicken Brand Standards Manual, and the franchisor and its affiliates must be named as additional insureds on the policies (except for employment liability insurance policies). The insurance company providing the coverage must be approved by Hck Hot Chicken, with such approval not being unreasonably withheld.
If a Hck Hot Chicken franchisee fails to obtain and maintain the required insurance, the franchisor has the option to procure the insurance on behalf of the franchisee. In such a case, the franchisee is responsible for paying the premiums, plus an additional 20% of the premium to cover Hck Hot Chicken's administrative costs. Additionally, all insurance policies must contain a provision requiring 30 days prior written notice to Hck Hot Chicken of any proposed cancellation, modification, or termination of the insurance.