Is a Bananas Smoothies Frozen Yogurt franchisee required to purchase insurance?

gencies, the standards and specifications established by Franchisor shall be final and binding upon Franchisee.

17. INSURANCE

17.01 Insurance Program.

• (a) Franchisee shall purchase and, at all times during the term of the Agreement shall maintain in full force and effect, policies of insurance for the following coverage:
• 1. Property insurance on a "Special Form" perils basis, covering the full replacement value of the Franchised Restaurant (Improvements and Betterments) and all of its Business Personal Property. Policy shall carry a Replacement Cost Valuation, a prescribed Amount endorsement, (no coinsurance) and a deductible not to exceed Two Thousand Five Hundred Dollars ($2,500). Amount of coverage shall be not less than the full replacement cost of all such property. Franchisor may request, from time to time, a reasonable increase in the amount of such property insurance in order to account for inflationary trends.
• 1. Equipment Breakdown covering the full replacement value of the Franchised Restaurant equipment, including business interruption and Spoilage resulting from such breakdown.
• 1. Business Interruption insurance, in sufficient amount to cover net profit plus continuing expenses (including payments to Franchisor for loss of royalties and other required remittance) for a period of at least one year, as a result of any insurable interruption in Franchisee's business operations.
• 1. Crime insurance, to include Employee Dishonesty, Money & Securities, Counterfeit Currency and Forgery & Alteration. Limits to vary by Franchisee's needs.
• 1. Comprehensive General Liability insurance, including premises/ operations, products/completed operations, liquor liability if applicable, contractual liability, and liability for the acts

of independent contractors, with Bodily Injury/Property Damage Liability limits of not less than One Million Dollars ($1,000,000) Per Occurrence and Two Million Dollars ($2,000,000) Per Location Aggregate. Employee Benefit Liability to be included.

• 1. Workers' Compensation/Employer's Liability insurance, with limits of not less than One Million Dollars ($1,000,000), as well as such other insurance as may be required by statute or regulation of the state or locality in which the Franchised Restaurant is located and operated.
• 1. Comprehensive Automobile Liability insurance covering both owned and non-owned vehicles owned and/or operated by Franchisee, with limits of not less than One Million Dollars ($1,000,000) Bodily Injury/Property Damage liability or, in the alternative, One Million Dollars ($1,000,000) Bodily Injury and Two Hundred Fifty Thousand Dollars ($250,000) Property Damage Liability.
• 1. Commercial Umbrella Liability insurance, with limits of not less than Two Million Dollars ($2,000,000) Per Occurrence and Two Million Dollars ($2,000,000) Aggregate, and arranged to cover over all above primary underlying coverages without gap (General Liability, Liquor Liability (if applicable), Employee Benefit Liability, Employers Liability, and Automobile Liability).
• 1. Contractor's Insurance. In connection with any construction, renovation, refurbishing, or remodeling of the restaurant, Franchisee will cause the general contractor to maintain Comprehensive General Liability insurance (including products/completed operations and independent contractors coverage) with limits of at least One Million Dollars ($1,000,000) Per Occurrence and Two Million Dollars ($2,000,000) Aggregate, naming Franchisor as an additional insured; Comprehensive Automobile Liability; Workers' Compensation; and such other insurance as may be required by law. In the event of new construction, the general contractor shall maintain Builders' Risk coverage on a "Special Form" perils basis, sufficient to cover the completed value of such new construction, naming Franchisee as Loss Payee.
• 1. Rental value insurance (in an amount sufficient to cover the rents and other fees due the landlord and/or Merchants' Association under the lease, if any, during any period of business interruption or inability to operate to operate the Franchised Restaurant Location) or such greater amounts of insurance as required by the lease for the Franchised Restaurant Location.
  • 1. Sign coverage for one hundred percent (100%) replacement value of sign.
  • 1. Coverage enhancements to include:
    • Personal Property off Premises
    • Property in Transit
    • Ordinance or Law
    • Spoilage of Perishable Goods
    • Off-premises Power Interruption
    • Food Spoilage/Contamination
    • EDP Equipment and software
    • Fine Arts
    • Personal Effects
    • Valuable Papers and Records
    • Outdoor Signs
    • Interior Glass
    • Fire Suppression System Recharge
    • Sewer or Drain Backup
    • Accounts Receivable

• Cyber Liability & Expense Reimbursement
• Trade Name Restoration
• Named Windstorm, Flood and Earthquake
• 1. You shall carry any additional insurance covering such additional risks or providing higher limits as Franchisor may request. For instance, we may require you to have Employer Practices Liability Insurance (EPLI) and name Franchisor as an additional insured.
• (b) All policies of insurance required under this section shall be in such form, and such amounts as Franchisor shall reasonably determine, and with such companies, rated not less than A- by Best's Rating Guide (or equivalent) duly authorized to do business in the state where the Restaurant Location is, and shall protect, as named and/or additional insureds, Franchisee, Franchisor and any other party designated by Franchisor. Franchisee shall furnish Franchisor and other named and/or additional insureds, and all other persons designated by Franchisor, with certificates issued by each of Franchisee's insurers indicating that all required insurance are in full force and effect and will not be terminated or changed without at least thirty (30) days prior notice thereto.
• (c) Should Franchisee fail, or neglect to obtain or maintain, in continuous full force and effect, the insurance coverage required by this Agreement, or by the terms and conditions of the Lease then, and in such event, at its exclusive option and without prior notice to Franchisee, Franchisor may purchase and obtain the required insurance coverage, and Franchisee hereby specifically agrees to pay to Franchisor its costs and expenses in purchasing, obtaining and maintaining such coverage.
• (d) Franchisee shall deliver copies of all such insurance policies or certificates of insurance, to Franchisor seven (7) days prior to the opening for business of the Restaurant. Upon failure of the Franchisee to deliver to Franchisor copies of such insurance policies or certificate of insurance within the required time then, and in such event, at its option and without prior notice to Franchisee (in addition to its rights under Paragraph 24 hereof), Franchisor may purchase and obtain the required insurance coverage, and Franchisee hereby specifically agrees to pay to Franchisor its costs and expenses in purchasing, obtaining and maintaining such coverage.
• (e) In any event, regardless of the provisions of this Paragraph 15, Franchisee shall indemnify, defen

Source: Item 23 — RECEIPT (FDD pages 58–231)