Under what circumstances can Itan increase the minimum liability coverage amount or require different/additional insurance for its franchisees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon 10 days' notice, we may increase the minimum liability coverage amount of any policy and/or require different or additional types of insurance, including excess liability (umbrella) insurance, due to inflation, special risks, changes in Law or standards of liability, higher damage awards or other relevant changes in circumstances. If you fail to maintain a required policy we may, at our option, obtain the policy on your behalf. If we do so, you must promptly sign any application or other form required to obtain the policy and reimburse all premiums and other costs we incur.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan has the right to increase the minimum liability coverage or require different or additional types of insurance under certain circumstances. Specifically, Itan may adjust insurance requirements due to inflation, special risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances.
Itan must provide the franchisee with 10 days' notice before increasing the minimum liability coverage amount or requiring different or additional types of insurance. This allows the franchisee time to adjust their insurance policies accordingly. The FDD mentions that additional types of insurance could include excess liability (umbrella) insurance.
If a franchisee fails to maintain the required insurance policies, Itan has the option to obtain the policy on the franchisee's behalf. In this case, the franchisee is obligated to sign any necessary application or form and reimburse Itan for all premiums and other costs incurred. This provision ensures that all Itan locations maintain adequate insurance coverage, protecting both the franchisee and the franchisor from potential liabilities.