What is the minimum liability limit required for employment practices liability insurance for a Beard Papas franchise, and what must it include?

According to the 2025 Beard Papas Franchise Disclosure Document, franchisees must maintain employment practices liability insurance with a minimum limit of $2,000,000. This insurance must include coverage for actions of a third party and a minimum limit of $100,000 for wage and hour disputes.

This requirement means that a Beard Papas franchisee needs to secure an insurance policy that protects the business against potential employment-related claims, such as discrimination, wrongful termination, or harassment. The $2,000,000 limit provides a financial buffer in case of a significant lawsuit or settlement. The inclusion of third-party actions broadens the coverage to include incidents involving the franchisee's employees and individuals outside the company, such as customers or vendors.

The specific inclusion of a $100,000 minimum limit for wage and hour disputes highlights the importance of complying with labor laws. Wage and hour claims can arise from issues like unpaid overtime, misclassification of employees, or improper deductions. This specific coverage ensures that the franchisee has financial protection to address these types of claims, which have become increasingly common and costly for businesses.

It is important for prospective Beard Papas franchisees to factor in the cost of this insurance when evaluating the overall investment and operating expenses of the franchise. They should consult with insurance professionals to obtain quotes and ensure that the policy meets all the requirements outlined in the Franchise Agreement and the FDD. Failing to maintain adequate insurance coverage could result in a breach of the Franchise Agreement and potential legal and financial repercussions.