What section of the Beauty Bungalows Franchise Agreement covers insurance requirements?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
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 premium amount as an administrative fee.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 22–23)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, Item 8, titled "Restrictions on Sources of Products and Services", outlines the insurance requirements for franchisees. This section mandates that franchisees maintain specific insurance coverage throughout the term of the franchise agreement.
The required insurance includes worker's compensation (if the franchisee has employees) with a minimum coverage of $500,000, fire, lightning, extended coverage, theft, vandalism, malicious mischief, flood (if applicable), and sprinkler leakage insurance for the Beauty Bungalows Franchise location. Additionally, franchisees must carry comprehensive general liability and product liability insurance coverage of at least $1,000,000, as well as professional liability insurance of at least $1,000,000 per occurrence. The franchisee is also responsible for any additional insurance required by lease or mortgage terms.
Beauty Bungalows may obtain the required insurance on behalf of the franchisee if the franchisee fails to do so, and the franchisee will be responsible for the premium cost plus a 20% administrative fee. Franchisees should carefully review Item 8 and consult with an insurance professional to ensure they meet all the necessary coverage requirements to protect their business and comply with the franchise agreement.