Under what conditions does HydroDog have the right to obtain insurance coverage for a HydroDog business at the franchisee's expense?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
19.4 Evidence of Coverage. Before the expiration of the term of each insurance policy, you must furnish us with a copy of each new, renewal or replacement policy you have obtained to extend your coverage, along with evidence of the premium payment. If you fail to maintain the required insurance coverage, or fail to furnish us with satisfactory evidence of insurance coverage and premium payments, we reserve the right, in addition to our other rights and remedies under this Agreement, to obtain any required insurance coverage on your behalf at your expense. If we do so, you must fully cooperate with us in our effort to obtain the insurance policies and must promptly sign all forms required to obtain or maintain the insurance. You must also allow any inspections of your HydroDog Business required to obtain or maintain the insurance. Finally, you must pay us, on demand, any costs and premiums we incur in obtaining insurance on your behalf. Neither your obligation to maintain insurance coverage nor our maintenance of insurance on your behalf will reduce or absolve you of any obligations of indemnification described in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog reserves the right to obtain required insurance coverage on behalf of a franchisee at the franchisee's expense if the franchisee fails to maintain the required insurance coverage or fails to furnish Hydrodog with satisfactory evidence of insurance coverage and premium payments.
If Hydrodog obtains insurance coverage on the franchisee's behalf, the franchisee must fully cooperate with Hydrodog in its effort to obtain the insurance policies and must promptly sign all forms required to obtain or maintain the insurance. The franchisee must also allow any inspections of their HydroDog Business required to obtain or maintain the insurance. The franchisee is obligated to pay Hydrodog, on demand, any costs and premiums incurred in obtaining insurance on their behalf.
It is important to note that the franchisee's obligation to maintain insurance coverage, or Hydrodog's maintenance of insurance on the franchisee's behalf, does not reduce or absolve the franchisee of any obligations of indemnification described in the Franchise Agreement. This means that even if Hydrodog secures insurance for the franchisee, the franchisee remains responsible for any liabilities or claims as outlined in the indemnification clauses of the agreement. This is a fairly standard clause in franchise agreements, designed to protect the franchisor from potential liabilities arising from the franchisee's operations.