What is the minimum aggregate liability coverage required for the comprehensive general, public, and product liability insurance policy that Annex Brands franchisees must maintain?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
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To ensure adequate insurance coverage, Subsection 9.I of the franchise agreement requires you to obtain and maintain in force, at your sole expense, under policies of insurance issued by carriers with no less than a Best's rating of A, the following:
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- Comprehensive general, public, and product liability insurance, against claims for bodily and personal injury, death, and property damage caused by or occurring in conjunction with the operation of your retail center or otherwise in conjunction with your conduct of business under the franchise agreement, under 1 or more policies of insurance containing a minimum of $2,000,000 per occurrence and $4,000,000 aggregate liability coverag
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 39–43)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands franchisees are required to maintain comprehensive general, public, and product liability insurance with a minimum of $2,000,000 per occurrence and $4,000,000 in aggregate liability coverage. This insurance protects against claims for bodily and personal injury, death, and property damage related to the operation of the retail center or the franchisee's business conduct.
This requirement ensures that Annex Brands franchisees have sufficient financial resources to cover potential liabilities arising from their business operations. Maintaining this level of coverage is a condition of the franchise agreement, and failure to do so could result in a breach of contract. The insurance policies must be issued by carriers with a Best's rating of A or higher, indicating a strong financial stability and ability to pay claims.
For prospective franchisees, this means factoring in the cost of this insurance coverage when assessing the overall investment and operating expenses of the franchise. It is important to shop around for insurance providers that meet the required Best's rating and offer competitive rates. Additionally, franchisees should understand the terms and conditions of their insurance policies to ensure they are adequately protected against potential risks. This is a standard practice in franchising to protect both the franchisee and the franchisor from significant financial losses due to unforeseen events.