Expected Outcomes

• Enterprise Risk Management (ERM) Considerations: Franchisors who carefully implement an insurance compliance program will 
• consider how it may impact the entire organization. 
• Engaged Franchisees: Franchisees who understand the importance of compliance are more likely to engage fully with your insurance compliance program.
• Risk Mitigation: Educating franchisees will significantly reduce the risk of claims and ensure both they and your franchise brand are protected from unnecessary liabilities.
• Sustainable Program: By integrating a culture of compliance into your franchise’s operations, you create a long-lasting and effective compliance program.

Establishing a Culture of Compliance

Lead by Example: As the franchisor, it's your responsibility to set the standard for compliance within your network. Your leadership and commitment will influence how seriously franchisees take the program. Make compliance a core part of your brand’s culture, showing franchisees that it’s not just about fulfilling legal requirements but about protecting their investment.

Communicate the Importance: Clearly communicate to your franchisees why compliance is essential—not just for you, but for them. Explain how maintaining proper insurance protects them from significant financial risks, potential business disruptions and self-insuring.

Shifting the Franchisee Mindset

Compliance as Protection: Help franchisees move from seeing compliance as a burden to understanding it as a way to safeguard their investments. Share real-world examples of how insurance coverage mitigated risks in your industry, so franchisees can see the direct benefits of being compliant.

Long-Term Value: Reinforce that maintaining insurance compliance isn’t just about avoiding penalties, but it’s about protecting their livelihood and future business growth. This perspective shift will help them see the value in active participation.

Providing Educational Resources

Initial Training: Ensure that you provide franchisees with thorough onboarding materials that detail insurance requirements and the compliance process. This can include webinars, FAQs, checklists, and explainer videos.

Ongoing Education: Build a routine of continuous education to keep franchisees informed. Schedule regular updates or refresher courses on insurance compliance, regulatory changes, and best practices.

Online Resources: Host an easily accessible online resource library that franchisees can refer to at any time for compliance guidance. This can be done through your internal system or franchisee portal.

Engagement and Accountability

Clear Roles and Responsibilities: Make sure franchisees understand their role in the compliance process. Clearly define what they need to provide, when they need to provide it, and how their compliance will be monitored. Use this opportunity to stress accountability and responsibility.

Open Communication: Foster a culture where franchisees feel comfortable reaching out with compliance questions or concerns. This open line of communication helps resolve issues early and reduces non-compliance risks.

Reward Participation: Consider implementing incentives or recognition for franchisees who maintain strong compliance records, creating positive reinforcement and healthy competition.

Enterprise Risk Management (ERM) Considerations

As a team, consider going through the following exercise: hold a meeting to ask the following questions of your team members to determine
how implementing an insurance compliance program may impact various parts of your organization. 

• How will requiring insurance across the entire franchise brand impact franchisee cost expectations?
• How will the onboarding experience for new franchisees be affected by the implementation of insurance compliance monitoring?
• What impact will compliance monitoring have on the relationship between franchisors and franchisees, and how can this be managed effectively?
• How will the additional administrative tasks influence the workload of the operations teams?
• What training programs or resources must be developed to ensure franchisees and staff understand the insurance compliance process?
• How will marketing and brand reputation be influenced by implementing a comprehensive insurance compliance program?
• What technological tools and integrations are required to support efficient insurance compliance monitoring?
• How can data from insurance compliance monitoring be leveraged to improve strategic decisions and business processes?
• What potential resistance might arise from franchisees, and how can communication strategies be adjusted to mitigate this?
• How can data from insurance compliance monitoring be leveraged to improve advertising and marketing initiatives to acquire more customers? 
• How will the insurance compliance monitoring program affect overall sales processes, particularly in terms of franchisee acquisition and retention?
• How will an insurance compliance program affect the trajectory of our organization?

Overcoming Barriers to High Adoption

Initial Outreach: If this is your first time requesting proof of insurance from all your franchisees using a compliance monitoring solution, consider easing into the process to maintain positive franchisee relationships. Starting with a clear, supportive approach can help franchisees understand the importance of compliance without feeling pressured.

Requirements: While insurance requirements are already outlined in the FDD, Franchise Agreement, or Operations Manual, collecting proof of compliance from all current franchisees may be new. This collection process is crucial—it reveals any compliance gaps that could expose the brand to significant risks and potentially catastrophic outcomes.

However, demanding comprehensive documentation all at once might not be the best way to support franchisees in protecting their investment. Instead, consider starting with the main coverages we recommend prioritizing, if applicable:

• General Liability
• Professional Liability (E&O, Medical Malpractice)
• Workers Compensation
• Commercial Auto 
• Umbrella 

Enhancing Franchisee Awareness of Additional Insurance Requirements: To address evolving business risks, many franchisors are now requiring additional coverages that are essential to protecting the brand. However, franchisees are often unaware of these requirements and may not be in compliance. Requesting all policies upfront can create friction, so it’s often more effective to educate franchisees gradually and ease into documentation requirements, especially if this is the first time asking for it. 

Additional coverages you may require include:

• Cyber Liability
• Employment Practices Liability Insurance (EPLI)
• Crime
• Bond
• Pollution Liability
• And others

Tiered Approach: A gradual approach helps franchisees understand the importance of these protections, supporting both their success and the brand’s long-term security. By initially requesting standard coverages and gradually educating them on additional requirements, you can encourage better adoption and foster a more informed franchisee base that values and appreciates the guidance provided.

Next Steps

• Create a training plan that includes both onboarding and ongoing educational components.
• Share help.protectmyfranchise.com with your franchisees as a resource hub to help franchisees 
• Schedule regular communication to update franchisees on compliance progress and expectations.