Is the Kidokinetics Franchisor obligated to procure insurance if the franchisee fails to do so?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.3. Failure to Procure.
If, for any reason, Franchisee should fail to procure or maintain the insurance required by this Agreement as revised from time to time for all franchisees by the Franchise Operations Manual or otherwise in writing, Franchisor will have the right and authority (without, however, any obligation) to immediately procure such insurance and to charge Franchisee for the cost of the insurance plus twenty percent (20%) of the premium for an administrative cost of obtaining the insurance.
Franchisee shall pay Franchisor immediately upon notice by Franchisor to Franchisee that Franchisor has undertaken such action and the cost.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage during the term of the agreement. While Kidokinetics does not have an obligation to procure insurance for a franchisee, it does retain the right to do so if the franchisee fails to maintain the required insurance.
If a Kidokinetics franchisee fails to procure or maintain the necessary insurance, Kidokinetics has the right and authority to procure such insurance. However, Kidokinetics is not obligated to do so. If Kidokinetics chooses to obtain insurance on behalf of the franchisee, the franchisee will be charged for the cost of the insurance plus an additional twenty percent of the premium to cover administrative costs.
The franchisee is responsible for paying Kidokinetics immediately upon notification that Kidokinetics has obtained the insurance and the associated costs. This provision ensures that Kidokinetics can maintain the necessary insurance coverage for the Kidokinetics business, protecting both the franchisee and franchisor from potential liabilities, while placing the financial burden of non-compliance on the franchisee.