Does the property insurance for a Bananas Smoothies Frozen Yogurt franchise need a coinsurance clause?

According to the 2025 Bananas Smoothies Frozen Yogurt FDD, property insurance for a franchise location must be written 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. The policy should carry a Replacement Cost Valuation, a prescribed Amount endorsement, and explicitly states '(no coinsurance)'. The deductible for this policy should not exceed $2,500.

This means that Bananas Smoothies Frozen Yogurt franchisees are required to obtain property insurance that covers the full cost of replacing the restaurant and its contents in case of damage or loss. The explicit exclusion of a coinsurance clause is beneficial for the franchisee. Coinsurance clauses typically require the insured party to cover a percentage of the replacement cost if the property is underinsured. By disallowing a coinsurance clause, Bananas Smoothies Frozen Yogurt ensures that franchisees are not penalized for potential underinsurance, provided they maintain coverage up to the full replacement value.

The FDD also specifies that Bananas Smoothies Frozen Yogurt must be named as an additional insured on the policy. This protects the franchisor's interests in the event of a claim. Franchisees must provide copies of the insurance policies or certificates to Bananas Smoothies Frozen Yogurt seven days before opening the restaurant for business. This allows the franchisor to verify that the franchisee has obtained the required coverage and that the franchisor is properly listed as an additional insured.

In addition to property insurance, Bananas Smoothies Frozen Yogurt franchisees must maintain other types of insurance, including Commercial Umbrella Liability insurance with limits of not less than $2,000,000 Per Occurrence and $2,000,000 Aggregate. They must also maintain rental value insurance, sign coverage, and several coverage enhancements, such as Personal Property off Premises, Property in Transit, and Ordinance or Law. Bananas Smoothies Frozen Yogurt can also request additional insurance coverage or higher limits as they deem necessary, such as Employer Practices Liability Insurance (EPLI).