How much business interruption insurance is required for a Beard Papas franchise, and what should it cover?

According to Beard Papas's 2025 Franchise Disclosure Document, franchisees must maintain business interruption insurance equal to 12 months of their net income and continuing expenses, including Royalty Fees. This insurance is designed to cover losses resulting from events that disrupt the business, such as property damage or other unforeseen circumstances.

The purpose of business interruption insurance is to help the franchisee stay afloat financially while the Beard Papas location is unable to operate normally. By covering net income, the insurance ensures that the franchisee continues to receive income similar to what they would have earned if the interruption had not occurred. Covering continuing expenses, such as rent, utilities, and loan payments, helps the franchisee meet their ongoing financial obligations. The inclusion of Royalty Fees in the coverage ensures that the franchisee can continue to pay these fees to Beard Papas even during a period of business interruption.

Franchisees should consult with their insurance carrier to determine the appropriate level of coverage needed to meet this requirement, as higher exposures may necessitate higher limits. It is important for prospective Beard Papas franchisees to factor in the cost of this insurance when evaluating the overall financial investment required to start and operate the franchise.