Does the Alloy franchise agreement specify that an appropriate deductible clause is permitted for the insurance coverage on the facility, improvements, furniture, fixtures, equipment, and supplies?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ge as a result of any actions or omissions of you or your employees, including any that relate to any party making a finding of any joint employer status, you will fully indemnify us for any such loss.
C. Insurance. You must purchase and maintain in full force and effect, at your expense and from a company we accept, insurance that insures both you and us, our affiliates and any other persons we designate by name. The insurance policy or policies must be written in accordance with the standards and specifications (including minimum coverage amounts) set forth in writing by us from time to time, and, at a minimum, must include the following (except as different coverages and policy limits may be specified for all franchisees from time to time in writing): (i) "special" causes of loss coverage forms (sometimes called "All Risk Coverage" or "All Peril Coverage") on the Facility, facility improvements and all furniture, fixtures, equipment, supplies and other property used in the operation of the Facility, for full repair and replacement value, except that an appropriate deductible clause is permitted; (ii) business interruption insurance covering a minimum of 12 months loss of income, including coverage for our Royalty Fees (for example, in the event of a fire or destruction of the premises, the insurance must cover our average royalty payments (based on the previous 12-month timeframe, or if a shorter timeframe, the total operating timeframe for the facility) during the rebuilding process); (iii) comprehensive general liability insurance in the amount of $1,000,000 per occurrence and $2,000,000 aggregate; (iv) personal and advertising injury insurance with minimum limits of $2,000,000 per occurrence; (v) fire damage coverage in an amount sufficient to cover the replacement costs of the Facility equipment, improvements and betterments; (vi) medical expense coverage in the amount of $10,000 to $25,000; (vii) workers' compensation insurance covering all of your employees, as required by law; (viii) employers liability insurance with contingent liability in amounts required by appli
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees are permitted to have an appropriate deductible clause in their insurance coverage for the facility. Specifically, Alloy requires franchisees to purchase and maintain insurance that covers both the franchisee and Alloy, its affiliates, and any other designated persons.
This insurance must include "special" causes of loss coverage forms on the facility, facility improvements, and all furniture, fixtures, equipment, supplies, and other property used in the operation of the Alloy facility. The coverage must be for the full repair and replacement value. However, the agreement explicitly states that "an appropriate deductible clause is permitted."
This clause benefits the franchisee by allowing them to manage their insurance costs through the use of a deductible. Selecting an appropriate deductible can lower premium costs, but franchisees should carefully consider their ability to cover the deductible amount in the event of a loss. Franchisees must ensure that the deductible is appropriate for their financial situation and risk tolerance, while still meeting Alloy's overall insurance requirements.