Is Equipment Breakdown insurance required for a Bananas Smoothies Frozen Yogurt franchise, and what should it cover?

According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, franchisees are required to maintain Equipment Breakdown insurance. This insurance must cover the full replacement value of the franchised restaurant's equipment. Furthermore, the coverage should include business interruption and spoilage resulting from such breakdowns.

This requirement ensures that if a critical piece of equipment fails, the franchisee can quickly replace it and mitigate losses from business interruption and spoiled inventory. For example, if the freezer breaks down, the insurance should cover the cost of replacing the freezer, the lost revenue from being unable to sell frozen yogurt, and the cost of the spoiled yogurt.

Bananas Smoothies Frozen Yogurt also stipulates that franchisees must maintain other insurance policies, including property insurance, business interruption insurance, crime insurance, comprehensive general liability insurance, workers' compensation/employer's liability insurance, comprehensive automobile liability insurance, and commercial umbrella liability insurance. Franchisees must also provide copies of all insurance policies or certificates to Bananas Smoothies Frozen Yogurt seven days before opening the restaurant for business.