Does the comprehensive general liability insurance for a Beauty Bungalows franchise need to insure both the franchisee and Beauty Bungalows?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
ate deductible clause will be permitted;
- C. Comprehensive general liability insurance and product liability insurance coverage in such amounts and upon such terms as may from time to time be customary for a salon studio rental business located in your Protected Territory, but not less than $1,000,000, insuring both you and Beauty Bungalows against all claims, suits, obligations, liabilities and damage, including attorneys' fees, based upon or arising out of actual or alleged personal injuries or property damage relating to the use or condition of the Beauty Bungalows Franchise.
- D. Professional liability insurance must be maintained at all times in amounts not less than $1,000,000 per occurrence. It must protect the Beauty Bungalows Franchise against all professional related claims.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, franchisees are required to maintain comprehensive general liability insurance. This insurance must cover both the franchisee and Beauty Bungalows.
The required coverage amount should be customary for a salon studio rental business in the franchisee's protected territory, but it must not be less than $1,000,000. This insurance protects both the franchisee and Beauty Bungalows from claims, suits, obligations, liabilities, and damages, including attorney's fees, arising from personal injuries or property damage related to the use or condition of the Beauty Bungalows Franchise.
In addition to comprehensive general liability insurance, franchisees must also maintain other types of insurance, including worker's compensation (if they have employees), fire, lightning, theft, vandalism, flood (if applicable), sprinkler leakage, and professional liability insurance. If a franchisee fails to maintain the required insurance, Beauty Bungalows has the right to obtain the insurance on the franchisee's behalf, and the franchisee will be responsible for the cost of the premium plus an administrative fee of 20% of the premium amount. This ensures that the franchise system remains protected even if a franchisee neglects their insurance obligations.