How often can Bang Cookies increase the minimum insurance coverage required of franchisees?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
The currently required insurance policies, insurance coverage requirements, and insurance coverage amounts are designated and set forth in the operations manual. Franchisor may, in Franchisor's Reasonable Business Judgment, periodically change the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. Notwithstanding the immediately foregoing sentence, Franchisor shall not increase such minimum coverage more than once every two years.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies may periodically change the amounts of coverage required under insurance policies and may require different or additional kinds of insurance at any time. This includes excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
However, Bang Cookies will not increase the minimum coverage more than once every two years. Franchisees must procure and maintain insurance policies at their own expense, naming Bang Cookies and its affiliates as additional insureds.
This means that while Bang Cookies can adjust insurance requirements, franchisees have some protection against frequent increases in coverage costs. Franchisees should factor in potential insurance cost increases when projecting their operating expenses and ensure they understand the types and amounts of coverage required.