Is a Benihana franchisee required to maintain builder's risk insurance during any remodeling of the restaurant, and if so, on what basis?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
currence" basis. The required insurance is:
- (a) comprehensive general liability insurance (with products, completed operations and contractual liability and independent contractors and escalators coverage) and comprehensive motor vehicle insurance (for owned and non-owned vehicles) against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the Restaurant (or otherwise in conjunction with your conduct of business) under one or more policies of insurance, each on an occurrence basis, with single-limit coverage for personal and bodily injury, death and property damage of at least $5,000,000;
- (b) All-risk building and contents insurance including fire, flood and earthquake, vandalism and theft insurance for the replacement value of the Restaurant and its contents;
- (c) business interruption insurance for a period adequate to reestablish normal business operations;
- (d) builders' risk insurance on a completed value non-reporting basis during the period of any remodeling of the Restaurant; and
- (e) workers' compensation insurance in such amount as may be required by applicable statute or rule.
All liability insurance policies must name us, and any of our affiliates that we specify, and our respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional named insureds and must include a waiver o
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–33)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees are required to maintain builder's risk insurance during any remodeling of the restaurant. This insurance must be maintained on a completed value non-reporting basis during the period of any remodeling.
In addition to builder's risk insurance, Benihana franchisees must also maintain other types of insurance coverage, including comprehensive general liability insurance with a single-limit coverage of at least $5,000,000 for personal and bodily injury, death, and property damage. They must also have all-risk building and contents insurance, including fire, flood, earthquake, vandalism, and theft insurance, for the replacement value of the restaurant and its contents. Business interruption insurance for a period adequate to reestablish normal business operations and workers' compensation insurance as required by applicable statute or rule are also required.
All liability insurance policies must name Benihana, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees as additional named insureds. The policies must also include a waiver of subrogation in favor of all those parties. Franchisees must obtain and maintain this insurance coverage during the term of the Franchise Agreement from a responsible, duly licensed carrier acceptable to Benihana. Benihana may modify its insurance requirements during the term of the Franchise Agreement, and franchisees must comply with any changes communicated in the Manual or in writing.