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Insurance and compliance matters aren&rsquo;t usually considered to be the fun parts of a franchise system, but they are important.

This is exactly where <a href="https://1851franchise.com/ezcertmgmt/info/index.html" target="_blank">EZ CERT</a> comes in. <a href="https://www.certmgmt.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=ez-cert-works-hard-so-that-franchise-systems-have-proper-insurance-and-compliance-tools-2709102" target="_blank" rel="nofollow" target="_blank">EZ CERT</a> works with franchisors and helps them with their approach to insurance and compliance. A lack of coverage makes both franchisors and franchisees at risk for litigation.

EZ CERT, which counts franchise brands such as Sport Clips, Nekter Juice Bar and Tropical Smoothie Cafe among its clientele, takes its job very seriously.

The brand would prefer that a haircutting franchise, for example, remain focused on haircutting and not have to become a de-facto expert on compliance and insurance.

&ldquo;What we do is tedious and time-consuming,&rdquo; EZ CERT account manager Heath Groves said. &ldquo;It&rsquo;s also non-revenue producing. Having insurance and being compliant doesn&rsquo;t make a franchise better at its core product, just because they have it. It saves them a lot of effort, time and money, but it doesn&rsquo;t add revenue, so if they can outsource that responsibility to us it&rsquo;s a better deal for them.&rdquo;

Each franchise location can have multiple certificates of insurance, Groves said, adding that these different certificates might only show proof of one or two insurance coverages and might not reveal all coverages purchased. Certificates of insurance have to be looked at each month, as they expire, and if done right it can be very labor-intensive, Groves said.

&ldquo;You have to make sure you don&rsquo;t miss anything,&rdquo; Groves said.

Groves noted that certificates of insurance and compliance are often the last item on a franchise&rsquo;s to-do list.

&ldquo;We&rsquo;ve come across brands that have a compliance manager, but those brands are having to pay a full salary for that person and all they do is manage certificates,&rdquo; Groves said. &ldquo;And if it&rsquo;s not their main job, it usually falls to the end and doesn&rsquo;t get kept up with well or not at all.&rdquo;

Groves noted that certificates of insurance are often as much as 10 years old in established franchise systems and that they&rsquo;re only collected when a franchise location opens. Sometimes, collecting these certificates is not even on the checklist of items and the franchisor is unaware of what&rsquo;s going on.

&ldquo;The doors are opening and you&rsquo;re wondering if this new franchise, a restaurant for example, even has liquor liability coverage,&rdquo; Groves said. &ldquo;To help make it easier, EZ CERT provides another set of eyes. We collect and monitor certificates on a constant basis. Companies don&rsquo;t have to pay a full-time compliance person to do it for them.&rdquo;

The best time to review insurance and compliance, Groves said, is when a new, emerging brand is just starting to franchise.

&ldquo;If we get a brand early and they only have three to five locations, then that&rsquo;s ideal,&rdquo; Groves said. &ldquo;It&rsquo;s a great time to add new locations as the system is growing, and the franchisor won&rsquo;t have to go four years back and check in with franchisees who aren&rsquo;t even trying to send their certificates of insurance in on an annual basis.&rdquo;

Certificates of insurance, Groves said, can be confusing to read if one doesn&rsquo;t look at them very often.

&ldquo;We&rsquo;ve got to change behaviors,&rdquo; Groves said. &ldquo;If we can get to the franchisees early then it just becomes a normal process. They&rsquo;re used to someone monitoring insurance. We like to get involved early on. Typically though, we don&rsquo;t normally get involved until the train is off the tracks and we have to put it back on the tracks. The main reason brands are calling is because they already have a problem.&rdquo;

Groves noted that many franchisees will tell the franchisor they have insurance and that explanation will often suffice for the franchisor, without the proper proof.

&ldquo;We don&rsquo;t just take your word for it,&rdquo; Groves said. &ldquo;Our goals is to have the franchisor be able to look at the system and realize they are at 80 or 90 percent compliance. That&rsquo;s when we know we&rsquo;re doing our job. When we get people who are at 10 percent compliance and over the course of a year get them to a manageable number, I feel like that&rsquo;s a success.&rdquo;

Some franchises have no compliance whatsoever because that&rsquo;s the way it&rsquo;s always been, which has the system in chaos, Groves said.

&ldquo;Chaos is not good in the franchise business,&rdquo; Groves said. &ldquo;We can&rsquo;t have a brand out there with everyone playing by their own operations manual. This defeats the purpose of being a franchise. You bought a franchise because you want a business in a box.&rdquo;

A franchise system that does not adhere to insurance and compliance-related matters ultimately risks getting dragged into a lawsuit, Groves said. For example, if a franchisor is located in Austin, Texas and a franchisee in California has a slip-and-fall accident, it can blur the lines of who is responsible and who can be held liable.

&ldquo;We want to keep the lawsuit at the local level and draw a line between the franchisee and the franchisor,&rdquo; Groves said. &ldquo;If you have a conference call with your franchisees, we want to be on the line so we can offer insurance help to those franchisees. They&rsquo;re free to use whatever insurance they want, but the guy in their local town doesn&rsquo;t have the power of the brand them. That&rsquo;s where our value comes in.&rdquo;

EZ CERT Works Hard So That Franchise Systems Have Proper Insurance and Compliance Tools

1851 Franchise

EZ CERT account manager Heath Groves tells all. 

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EZ CERT Works Hard So That Franchise Systems Have Proper Insurance and Compliance Tools

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