Is a Beauty Bungalows franchisee required to maintain insurance?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
or approve of your purchase.
Insurance
You must, at all times, maintain insurance as follows:
- A. If you have employees, workers' compensation insurance in amounts prescribed by law in your territory but not less than $500,000 in coverage;
- B. Fire and lightning, extended coverage, theft, vandalism and malicious mischief, flood (if the Beauty Bungalows Franchise is in a Designated Flood Hazard Area), and sprinkler leakage insurance on the Beauty Bungalows Franchise and all fixtures, equipment, supplies and other property used in the operation of the Beauty Bungalows Franchise, for not less than 100% of the replacement value of the same, except that an appropriate 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. If renters of said Beauty Bungalows Franchise have operations that are excluded on professional liability policy, Franchisee is responsible for ensuring that the excluded operation is covered under a separate policy.
- E. Such additional insurance as may be required by the terms of any lease or mortgage for the Beauty Bungalows Franchise.
- F. If you do not maintain the required insurance, then we may obtain it for you and you will owe us the cost of the insurance premium plus 20% of the
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage at all times. This includes several types of insurance with minimum coverage amounts. If the franchisee has employees, they must maintain workers' compensation insurance of at least $500,000.
Additionally, franchisees must have fire, lightning, extended coverage, theft, vandalism, malicious mischief, flood (if the location is in a Designated Flood Hazard Area), and sprinkler leakage insurance covering 100% of the replacement value of the Beauty Bungalows Franchise, including all fixtures, equipment, and supplies. They also need comprehensive general liability and product liability insurance of at least $1,000,000, protecting both the franchisee and Beauty Bungalows against claims related to personal injuries or property damage.
Furthermore, franchisees must maintain professional liability insurance of at least $1,000,000 per occurrence to protect against professional-related claims. If renters of the Beauty Bungalows Franchise have operations excluded from the professional liability policy, the franchisee is responsible for ensuring those operations are covered under a separate policy. The franchisee must also carry any additional insurance required by the terms of their lease or mortgage. If a franchisee fails to maintain the required insurance, Beauty Bungalows has the right to obtain the insurance on their behalf, and the franchisee will be responsible for the cost of the premium plus an administrative fee of 20% of the premium amount.