What is the estimated cost range for insurance for an Annex Brands franchise?

According to Annex Brands' 2025 Franchise Disclosure Document, the estimated initial investment for insurance ranges from $0 to $7,000. This figure is part of the overall initial investment needed to start a standard, flex, or express retail center.

The FDD specifies several insurance coverage requirements. Franchisees must maintain comprehensive general liability insurance with a limit of not less than $2,000,000 per occurrence and $4,000,000 aggregate. They also need motor vehicle liability coverage with a combined single limit of at least $2,000,000 per occurrence. Notary professional liability insurance of at least $500,000 is required, or the maximum permitted by the state if less than $500,000. Property insurance for the retail center must cover any loss included on the standard "Causes of Loss-Special Form," including vandalism, malicious mischief, and theft, in an amount not less than 100% of the actual replacement cost, including coverage for property of others in the franchisee's care, custody, or control, with a minimum limit of $400,000. Business interruption coverage must be provided on an "actual loss sustained" basis for a period of not less than 24 months or the maximum permitted by the state if less than 24 months. Coverage for employee dishonesty ($25,000 limit) is also required. Franchisees must maintain any workers' compensation, employer's liability, or comparable insurance as required by law in their jurisdiction, or additional types and coverage amounts as Annex Brands may periodically designate.

The estimated annual premium for general coverage is about $1,500 to $5,000, while the annual premium for workers' compensation insurance is based on employee payroll. Most state insurance carriers offer workers' compensation coverage subject to an annual minimum premium of about $1,000. Franchisees must participate in any Annex Brands group-wide or other designated insurance program that is available to franchisees regarding small parcel, freight, or transit damage and related risks. Premiums generally range from $.55 to $1.75 per $100 of property valuation, packaging, and shipping charges, though Annex Brands may increase the rate if a franchisee has a high number of claims due to improper packaging and shipping standards (generally, $0.72 to $2.28 per $100 of property valuation, shipping and packaging charges) after at least 15 days' notice. Premiums and insurance programs are subject to change after at least 15 days' notice.

For flex retail locations, a "Bailee's" coverage insurance policy is required in addition to small parcel, freight, or transit damage insurance. The "Bailee's" policy must include coverage of personal property of others in an insured's care, custody, and control that is temporarily at an insured's center with a minimum limit of $400,000, coverage of personal property of others in an insured's care, custody, and control at another location with a minimum limit of $400,000, and coverage that includes the transportation of personal property of others while in an insured's auto or truck with a minimum limit of $400,000. If franchisees choose to provide expanded services of household moving and other relocation products and services, they must also have employment practices insurance (including sexual harassment, wrongful termination, and discrimination coverage) in the amount of at least $500,000 for each incident and $1,000,000 in the aggregate, and an umbrella policy (covering general liability, auto, and employer's liability) with a limit of at least $2,000,000.

Prospective franchisees should note that these insurance costs can vary based on location, the size of their operation, and the services they offer. It is important to obtain accurate quotes from insurance providers and to understand the specific requirements outlined in the franchise agreement to ensure adequate coverage and compliance with Annex Brands' standards. Additionally, franchisees must add Annex Brands, its affiliates, and other indemnitees to their policies as additional insureds, except for workers' compensation, employer's liability, comparable, and/or employment practices insurance policies. All insurance must be issued by responsible insurance companies with a Best's rating of not less than A.