Does the Mrcool FDD specify any requirements for the franchisee to maintain insurance coverage for the Development Centers?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 8 INSURANCE
Franchisee must procure and maintain in full force at all times during the Term of this Agreement, at Franchisee's sole expense, on a primary rather than a participatory basis with Franchisor, an insurance policy or policies protecting Franchisee as named insured and naming, as additional insureds, Franchisor, Franchisor's affiliates, Franchisor's successors and assigns, and the officers, directors, shareholders, partners, agents, representatives, independent contractors and employees of Franchisor against any demand or claim with respect to personal injury, death or property damage, or any loss, liability or expense whatsoever arising or occurring upon or in connection with the Franchised Business. The policy or policies must be written by a responsible carrier or carriers with an AM Best Rating of at least A-, VII and reasonably acceptable to Franchisor.
The currently required insurance policies, insurance coverage requirements, and insurance coverage amounts are designated and set forth in the Operations Manual. Franchisor may, in Franchisor's Reasonable Business Judgment, periodically change the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. Notwithstanding the immediately foregoing sentence, Franchisor shall not increase such minimum coverage more than once every two years. All public liability and property damages policies must contain a provision that Franchisor is entitled to recover under these policies on any loss occasioned to Franchisor, Franchisor's affiliates, Franchisor's successors and assigns, and the officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, and employees of Franchisor by reason of the negligence of Franchisee and/or Franchisee's officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, and employees.
By the earlier of 90 days after the Effective Date or prior to the commencement of the Training Program, Franchisee must deliver, or cause to be delivered, to Franchisor a copy of the certificates of insurance demonstrating Franchisee's compliance with this Article 8. All insurance policies required must expressly provide that no less than 30 days' prior written notice shall be given to Franchisor in the event of a material alteration to, or cancellation of, any insurance policy Franchisee is required to maintain in accordance with this Agreement.
In the event Franchisee fails, for any reason, to procure or maintain the insurance required by this Agreement, then Franchisor has the right and authority (but not the obligation) to immediately to procure
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, franchisees are required to procure and maintain insurance policies throughout the term of the agreement. These policies must protect the franchisee as the named insured and also name Mrcool, its affiliates, successors, assigns, officers, directors, shareholders, partners, agents, representatives, independent contractors, and employees as additional insureds. The insurance must cover any claims related to personal injury, death, property damage, loss, liability, or expense occurring in connection with the franchised business.
The insurance policies must be written by carriers with an AM Best Rating of at least A-, VII and be reasonably acceptable to Mrcool. The specific types of insurance policies, coverage requirements, and coverage amounts are detailed in the Operations Manual, which Mrcool may periodically change. However, Mrcool cannot increase the minimum coverage more than once every two years. All public liability and property damage policies must include a provision allowing Mrcool to recover under the policies for any losses caused by the franchisee's negligence.
Prospective Mrcool franchisees should carefully review the Operations Manual to understand the specific insurance requirements, including the types and amounts of coverage needed. Franchisees must provide certificates of insurance to Mrcool within 90 days of the Effective Date or before starting the Training Program. The insurance policies must also provide Mrcool with at least 30 days' prior written notice in case of any material alteration or cancellation. Failure to maintain the required insurance allows Mrcool to procure insurance on the franchisee's behalf and charge the franchisee for all associated costs and fees.