What must Spray Net franchisees provide to the franchisor regarding their insurance policies?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as Franchisor periodically specifies), unless Franchisor designates specific carriers from which Franchisee must purchase coverage (in which case Franchisee may only purchase from the designated carrier(s)). Franchisor may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances. All insurance policies Franchisee purchases must name Franchisor and any affiliate Franchisor designate as additional insureds, and provide for thirty (30) days' prior written notice to Franchisor of a policy's material modification or cancellation. The cost of Franchisee's premiums will depend on the insurance carrier's charges, terms of payment, and Franchisee's insurance and payment histories. Franchisee shall make timely delivery of certificates of all required insurance to Franchisor, each of which shall contain a statement by the insurer that the policy will not be cancelled or materially altered without at least thirty (30) days' prior written notice to Franchisor. The procurement and maintenance of such insurance shall not relieve Franchisee of any liability to Franchisor under any indemnity requirement of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees must provide certificates of all required insurance to Spray Net. These certificates must include a statement from the insurer guaranteeing at least thirty (30) days' prior written notice to Spray Net before any policy cancellation or material modification.
Spray Net mandates that franchisees secure insurance exclusively from carriers with a rating of A-VIII or better from A.M. Best and Company, Inc., or according to similar criteria specified by Spray Net. However, Spray Net retains the authority to designate specific insurance carriers from which franchisees must obtain coverage, in which case franchisees are obligated to purchase from those designated carriers.
Spray Net also has the right to periodically adjust the required coverage amounts, or mandate different or additional insurance coverage, to account for factors such as inflation, new risk identification, legal changes, liability standards, higher damage awards, economic shifts, or other relevant changes. All insurance policies must name Spray Net and any designated affiliates as additional insureds. The franchisee is responsible for the cost of premiums, which will vary based on the insurance carrier's charges, payment terms, and the franchisee's insurance and payment history. It is important to note that obtaining and maintaining insurance does not relieve the franchisee of any liability to Spray Net under any indemnity requirement of the Franchise Agreement.