For any Franchisor one of the biggest concerns is damage to the brand as this will not only impact on the ability to sell more franchises but has the ability to impact on the revenue of existing franchises and hence the franchise revenue.

One of the biggest causes of failure in any small business is the death or disability of the principal of that business. The impact of this is greatly magnified when we apply it to the franchise model.

Customers and trade creditors can be relentless in their search for recompense in the event of a business failure. They can and will harass other franchisee’s and the franchisor if they think there is some way they can elicit their dues from them.

Traditionally it has been difficult insuring start up business’ for loss of revenue in the event of the principals incapacity as there is no historical data to base the cover on.

This has now been resolved.

PEAK FINANCIAL SERVICES can now offer a product that protects both the franchisor, the franchisee AND the franchisee’s business in the event of the death, temporary or permanent disablement of the franchisee.

If the franchisee is temporarily disabled the insurer will pay an agreed sum to the franchisor for them to step in and manage (or engage a manager) to look after the franchisee’s business until they recover for 12 months.

If at the end of 12 months the franchisee is still unable to return to work they will likely be classified as permanently disabled and the insurer will pay out an agreed sum to enable the franchisor to purchase the franchise back from the franchisee at the market value of the business (as agreed by the parties from time to time, each year as a minimum). The same thing will occur if the franchisee dies.

This gives both parties peace of mind.

The Franchisor knows that they can manage or re-purchase a franchise and so protect the image of their brand.

The franchisee and their family knows that in the event of their disability their business will be managed by the people who know it best and should they not be able to return to work they have a guaranteed buyer at an agreed market price.

And the cost of all this wonderful protection?

That will depend on a variety of factors but in some cases it has been as little as $20 per week.

It is important that the franchise agreement specifies that this cover be put in place and specifies the events which trigger the Franchisor stepping in to manage and/or purchasing back the business.

With 30 years experience in the industry, director Gary Palmer is well positioned to assist and advise with this process.


As a smart Franchisor you will have made sure that your insurance provides for a level of Indemnity cover in the event of a Franchisee making a significant mistake and being found liable. But what happens when your Franchisee’s insurer pays out under their liability cover and then decides that you should share in the cost and comes after you?

Yes, your liability cover will (hopefully) protect you. But do you really want the time and grief of going through the process when you have better things to do with your time and energy?

In most situations we at Peak Financial Services can ensure that the buck stops with your Franchisee’s insurer.

No cost to you as the Franchisor.

How do we do this?

Give us a call and set up a meeting.

We will review your and your Franchisee’s insurances and make the required alterations.

And in the process we are likely to be able to expand your covers at no additional cost.