Does 7 Brew have the right to change the required insurance coverage amounts?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance
You must maintain insurance coverage for the Store at your own expense in the amounts, and covering the risks, we periodically specify. Your insurance carriers must be licensed to do business in the Store's state and be rated A-, VII or higher by A.M. Best and Company, Inc. (or satisfy our other criteria). We have the right periodically to increase the required coverage amounts and/or require different or additional insurance coverage at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or relevant changes in circumstances. Insurance policies must be written in your name and name us (and our parent companies, subsidiaries, and all other affiliates, and our and their respective officers, owners, directors, agents, representatives, and employees) as additional insureds for claims arising from your products and operations. You must provide updated insurance policies and proof of payment to us at least 10 days before the expiration or termination of such policy or policies.
You currently must have the following minimum insurance coverage: (i) commercial general liability insurance (including product, contractual, and owned and non-owned vehicle liability coverages) in minimum amounts of $2,000,000, aggregate single limit coverage; (ii) "All Risk" property damage insurance; (iii) plate glass insurance and boiler insurance (if applicable);
(iv) employer's liability, workers' compensation, and such statutory insurance as may be required in the state in which the Store is located; and (v) employment practices liability insurance with a limit of not less than $1,000,000 per occurrence and $1,000,000 aggregate. We recommend a $5 million umbrella coverage and cyber-insurance up to $1,000,000. You also must obtain and maintain all other insurance required under app
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–32)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, 7 Brew has the authority to modify the required insurance coverage amounts for franchisees. 7 Brew can periodically increase the required coverage amounts and/or require different or additional insurance coverage at any time. This can be done to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or relevant changes in circumstances.
7 Brew mandates that franchisees maintain insurance coverage for their stores at their own expense, with the specific amounts and risks covered as specified by 7 Brew periodically. The insurance carriers must be licensed in the store's state and have a rating of A-, VII or higher by A.M. Best and Company, Inc., or satisfy 7 Brew's other criteria. Franchisees are required to provide updated insurance policies and proof of payment to 7 Brew at least 10 days before the expiration or termination of the policies.
The minimum insurance coverage currently required includes commercial general liability insurance (including product, contractual, and owned and non-owned vehicle liability coverages) in minimum amounts of $2,000,000 aggregate single limit coverage. It also includes "All Risk" property damage insurance, plate glass insurance and boiler insurance (if applicable), employer's liability, workers' compensation, and such statutory insurance as may be required in the state in which the Store is located, and employment practices liability insurance with a limit of not less than $1,000,000 per occurrence and $1,000,000 aggregate. 7 Brew recommends a $5 million umbrella coverage and cyber-insurance up to $1,000,000. Franchisees must also obtain and maintain all other insurance required under applicable state law.
This provision allows 7 Brew to adapt to changing economic conditions, legal requirements, and risk landscapes, ensuring that all franchise locations maintain adequate protection. For a prospective franchisee, this means that insurance costs could increase over time, and they need to factor in potential adjustments to their budget to accommodate these changes. It is important to maintain open communication with 7 Brew regarding insurance requirements and to stay informed about any changes to ensure compliance and adequate coverage.