What section of the Annex Brands franchise agreement specifies insurance requirements?
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 coverage.
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- Notary professional liability insurance of at least $500,000 or the maximum permitted by the state if less than $500,000.
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- Property insurance against any claims at your retail center included within the classification "Causes of Loss – Special Form," including vandalism, malicious mischief and theft. The coverage must be in an amount not less than 100% of the actual replacement cost of your retail center, and also must include property of others in your care, custody or control with a minimum limit of $400,000, and employee dishonesty coverage with a minimum limit of $25,000.
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- Business interruption coverage 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.
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- Motor vehicle liability insurance policies covering all vehicles (owned, nonowned, leased, hired, rented or borrowed) operated by or on behalf of the busine
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 39–43)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, Subsection 9.I of the franchise agreement outlines the insurance requirements for franchisees. To ensure adequate coverage, franchisees must obtain and maintain specific insurance policies at their own expense, issued by carriers with a Best's rating of A or higher.
The required insurance includes comprehensive general, public, and product liability insurance with a minimum of $2,000,000 per occurrence and $4,000,000 aggregate liability coverage. Franchisees also need notary professional liability insurance of at least $500,000 (or the maximum permitted by state law if less), property insurance covering 100% of the retail center's replacement cost, including coverage for others' property with a minimum limit of $400,000, and employee dishonesty coverage with a minimum limit of $25,000. Business interruption coverage on an "actual loss sustained" basis for at least 24 months is also mandatory.
Furthermore, franchisees must maintain motor vehicle liability insurance policies with a minimum amount of $2,000,000. They must also carry any legally required workers' compensation and employer's liability insurance, along with any other insurance coverage that Annex Brands periodically requires. For flex centers offering expanded services like household moving, "Bailee's" insurance with specific coverage limits for personal property is necessary. Additionally, these flex centers must have employment practices insurance of at least $500,000 per incident and $1,000,000 in the aggregate, as well as umbrella insurance with a minimum limit of $2,000,000.
The insurance coverage must align with the correct company classifications for businesses like retail centers specializing in business support, mailbox rental, package receiving, postal services, printing, copying, packaging, shipping, and related services. Franchisees are also required to participate in any group-wide or Annex Brands-sponsored insurance program for small parcel, freight, or transit damage, and must pay all associated premiums. Annex Brands received $588,000 in revenue from the insurance program in the fiscal year ended September 30, 2024, which represented 2.4% of their total revenue of $24,936,000, while the program's expenses were $268,000.