What are the insurance requirements that an Aunt Millies Bakeries distributor must maintain to avoid default?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, distributors are required to maintain specific insurance coverage for computer equipment provided by Aunt Millies Bakeries. Specifically, the distributor must carry "all risk" insurance on the computer equipment in the minimum amount of $5,000. Aunt Millies Bakeries (and any of its affiliates requested in writing by Aunt Millies Bakeries) must be included and named as an additional insured and/or loss payee on this policy. The distributor is responsible for bearing the expense of this insurance.

The FDD stipulates that the distributor must provide Aunt Millies Bakeries with a copy of the insurance certificate within 30 days of the agreement's effective date. This requirement ensures that Aunt Millies Bakeries is promptly informed of the insurance coverage and can verify compliance. Failure to maintain the required insurance or provide proof of coverage could potentially lead to a breach of the agreement, as compliance with obligations outlined in the agreement is critical.

This insurance requirement is tied to the computer equipment that Aunt Millies Bakeries provides for the distributor's use in operating and servicing their distribution of Aunt Millie's products. The computer equipment may be exchanged or replaced by Aunt Millies Bakeries or its affiliates from time to time with similar or comparable equipment. The distributor pays a weekly fee of $30.00, plus sales and use tax, for the use of the Computer Equipment. This fee is subject to change by Aunt Millies Bakeries upon thirty (30) days' notice. The distributor is also responsible for exercising due and reasonable care in the use and possession of the Computer Equipment.

Prospective franchisees should carefully review the insurance requirements and costs associated with the computer equipment to fully understand their obligations and budget accordingly. It is also advisable to discuss with Aunt Millies Bakeries any specific insurance providers or policy terms they recommend or require to ensure compliance with the franchise agreement.