Is a Benihana franchisee required to maintain builders' risk insurance at all times, or only during remodeling?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) builders' risk insurance on a completed value non-reporting basis during the period of any remodeling of the Restaurant. Franchisee will only be required to obtain and maintain the insurance specified under this subsection 12.2(d) during the period in which any construction and/or remodeling work is being performed.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees are required to maintain builders' risk insurance only during periods when the restaurant is undergoing remodeling. This insurance coverage must be on a completed value, non-reporting basis.
This means a Benihana franchisee doesn't need to carry this specific type of insurance continuously. It is only necessary when there is active construction or remodeling work being performed at the restaurant location. This can save the franchisee money on insurance premiums during times when no remodeling is taking place.
However, Benihana franchisees must maintain other types of insurance coverage throughout the entire franchise term, including comprehensive general liability insurance, products liability coverage, business interruption coverage, employers' liability insurance, and all-risk building and contents insurance. The franchisee must obtain Benihana's approval of all insurance contracts before entering into them and provide certificates of insurance to Benihana immediately after issuance.