Advice You - Business

Mobile based franchising companies must consider the potential eventuality of being sued or named in a lawsuit, which is directed at a franchisee due to a traffic accident while cond

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ucting the franchise outlets business operations. In places like New York, California, Washington D.C. the number of lawsuits from traffic accidents are astounding. Without protecti

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

n and separation from the franchise outlets, a franchisor might unnecessarily open themselves up for liability issues of one of their franchisees.

It is for this reason that in my f

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

anchising agreements are decided to spend special attention to the clauses regarding insurance, limits of liability and operations of vehicles in the franchise business. Below is a

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

opy of the clause that I inserted into our franchise agreements;

3.21 Insurance

3.21.1 Limits of Liability

Prior to the commencement of any operations under this Agreement, Franch

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

see must maintain, at their sole expense, a business liability, comprehensive and completed operations insurance policy or policies in accordance with standards and specifications se

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

forth in the Confidential Operations Manual, which must include at a minimum the following coverage:

(a) Comprehensive general liability insurance, in the amount of $100,000 bodily

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

injury per occurrence and $50,000 property damage per occurrence;

(b) Vehicle insurance in the amount of $100,000 single limit, including comprehensive and collision;

(c) Worke

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

’s Compensation and Employer’s liability insurance (if Franchisee has employees); and

(d) Equipment insurance for the value of all The Car Wash Guys equipment. If Franchisee fin

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

nces the equipment, the lending institution may also require Franchisee to maintain fire/theft/comprehensive insurance for the value of that equipment.

3.21.2 Additional Insured

Fr

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

nchisor shall be named as an additional insured under all insurance policies, as its interests may appear, and contain a waiver by the carrier of all subrogation rights against Franc

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

hisor. Maintenance of insurance under this paragraph shall not relieve Franchisee of liability under the default provisions set forth in this Agreement.

3.21.3 Other Requirements

F

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

anchisor may, at its discretion, change the required coverage and the limits of liability for Franchisee’s insurance during the term of this Agreement. Franchsior may require Franchi

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ee to increase the minimum limits of coverage to keep pace with regular business practice and prudent insurance custom. In the event Franchisor does this, Franchisee may be paying a

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

igher or lower premium.

The insurance will not be limited in any way because of any insurance Franchsior maintains. The insurance will not be subject to cancellation except upon twe

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ty (20) days' written notice to Franchsior. Certificates of Franchise’s insurance policies will be kept on deposit with Franchisor. Maintenance of the required insurance will not dim

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

nish Franchisees liability to Franchisor under the indemnities contained in this Agreement.

--- --- --- --- ---

If you run or operate the mobile franchise company you must pay atte

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

tion to the insurance issues and make sure you or additionally insured to prevent risks to your financial health as a franchisor. You will need to contact the franchise attorney to

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ake sure the clause in your contracts is up-to-date, considers all the recent case law and is liable for the jurisdiction of your franchise company and the jurisdiction of the franch

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

se outlets where you will be selling these franchises. Make sure you get a franchise attorney who is knowledgeable inexperienced in this area. I hope you will consider this in 2006

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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