When must a Spray Net franchisee procure and maintain the required insurance?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisee or the Franchised Business; and (ii) Franchisee's partners, officers, directors, as well as any of the Designated Manager(s) that manage the day-to-day operations of the Franchised Business. Franchisee will notify Franchisor in writing within ten (10) days after any such change, unless Franchisor is required to first notify Franchisor and obtain its approval prior to making any such change.
11. INSURANCE
- A. Required Insurance. Franchisee shall, at its own expense and no later than the earlier of (a) the date on which Franchisee uses any of the Proprietary Marks, or (b) the date Franchisee begins building out the Premises, procure and maintain in full force and effect throughout the term of this Agreement the types of insurance enumerated in the Manuals or otherwise in writing (whether the Franchised Business is open or not). This insurance shall be in such amounts Franchisor or the lessor of the Premises designates from time to time, with Franchisor having the right to designate such insurance coverage updates in the Manuals at any time upon written notice. In addition to any other insurance that may be required by applicable law, or by lender or lessor, Franchisee shall procure:
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- Commercial general liability insurance, including personal injury, completed operations, contractual liability, and products liability, in an amount of not less tha
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Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a franchisee must procure and maintain the required insurance no later than the earlier of two dates: (a) the date on which the franchisee uses any of Spray Net's proprietary marks, or (b) the date the franchisee begins building out the premises. This insurance must remain in full force and effect throughout the term of the Franchise Agreement, whether the franchised business is open or not.
The required insurance types and amounts are detailed in the manuals or in writing from Spray Net, with updates possible at any time upon written notice. In addition to legally required insurance or that required by a lender or lessor, franchisees must secure commercial general liability insurance of at least $2,000,000 per occurrence for bodily injury and $2,000,000 per occurrence for property damage, naming Spray Net as an additional insured. Franchisees also need fire, vandalism, and extended coverage insurance with primary and excess limits not less than the full replacement value of the premises and its contents.
This requirement ensures that Spray Net franchisees are adequately protected from potential liabilities and risks associated with operating the business. It also protects Spray Net from potential liability related to the franchisee's operations. Franchisees should carefully review the insurance requirements outlined in the manuals and franchise agreement to ensure they obtain the necessary coverage in a timely manner. Failure to maintain adequate insurance could result in a breach of the franchise agreement and potential termination of the franchise.