What is the required action for a Bens Soft Pretzels franchisee regarding insurance coverage?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must deliver to us upon execution of the lease or purchase agreement for the Authorized Location, but before commencing construction of your Store, and thereafter annually or at our request a proper certificate evidencing the existence of such insurance coverage and your compliance with the provisions of this subparagraph. The insurance certificate must show our and our affiliates' status as an additional insured and provide that we will be given 30 days' prior written notice of material change in or termination or cancellation of the policy. The insurance policy or policies must be written in accordance with the standards and specifications (including minimum coverage amounts) set forth in writing by us from time to time, and, at a minimum, must include the following (except as different coverages and policy limits may be specified for all franchisees from time to time in writing): (i) "special" causes of loss coverage forms (sometimes called "All Risk Coverage" or "All Peril Coverage") on the Store, store improvements and all furniture, fixtures, equipment, supplies and other property used in the operation of the Store, for full repair and replacement value, except that an appropriate deductible clause is permitted; (ii) business interruption insurance covering a minimum of 12 months loss of income, including coverage for our Royalty Fees (for example, in the event of a fire or destruction of the premises, the insurance must cover our average royalty payments (based on the previous 12-month timeframe, or if a shorter timeframe, the total operating timeframe for the store) during the rebuilding process); (iii) comprehensive general liability insurance including product liability insurance and contractual liability insurance, with minimum limits of $2,000,000 per occurrence and $2,000,000 to $5,000,000 annual aggregate; (iv) personal and advertising injury insurance with minimum limits of $2,000,000 per occurrence; (v) fire damage coverage in an amount sufficient to cover the replacement costs of the Store equipment, improvements and betterments; (vi) medical expense coverage in the amount of $10,000 to $25,000; (vii) workers' compensation insurance covering all of your employees; (viii) employers liability insurance with contingent liability; (ix) umbrella liability insurance; (x) automobile liability insurance; (xi) "Per Location" aggregate limits when multiple store locations are insured under one comprehensive general liability and umbrella liability policy (cies); (xii) Ben's Soft Pretzels Franchising Corporation and its affiliates are named as additional insureds on all liability policies required by this subparagraph; (xiii) severability of interest and/or separation of insureds provisions must be included in the liability policies and an endorsement is required providing that the franchisee's insurance is primary with respect to any insurance policy carried by Ben's Soft Pretzels Franchising Corporation and its affiliates and any insurance maintained by Ben's Soft Pretzels Franchising Corporation or its affiliates is excess and non-contributing; (xiv) a waiver of subrogation endorsement must be obtained; and (xv) any other such insurance coverages or amounts as required by law or other agreement r
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–22)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, franchisees must obtain and maintain specific insurance coverage. This includes delivering a certificate of insurance to Bens Soft Pretzels upon execution of the lease or purchase agreement for the store location, before construction begins, and annually thereafter or at the franchisor's request. This certificate serves as proof of compliance with the insurance requirements. The insurance certificate must also show Bens Soft Pretzels and its affiliates as additional insured parties. Furthermore, Bens Soft Pretzels must receive 30 days' prior written notice of any material changes, termination, or cancellation of the insurance policy.
The required insurance coverage must adhere to the standards and specifications set by Bens Soft Pretzels, including minimum coverage amounts. These coverages include: (i) "special" causes of loss coverage forms on the store, store improvements, and all furniture, fixtures, equipment, supplies and other property used in the operation of the Store, for full repair and replacement value; (ii) business interruption insurance covering a minimum of 12 months loss of income, including coverage for Royalty Fees; (iii) comprehensive general liability insurance including product liability insurance and contractual liability insurance, with minimum limits of $2,000,000 per occurrence and $2,000,000 to $5,000,000 annual aggregate; (iv) personal and advertising injury insurance with minimum limits of $2,000,000 per occurrence; (v) fire damage coverage; (vi) medical expense coverage in the amount of $10,000 to $25,000; (vii) workers' compensation insurance; (viii) employers liability insurance with contingent liability; (ix) umbrella liability insurance; (x) automobile liability insurance; (xi) "Per Location" aggregate limits when multiple store locations are insured under one comprehensive general liability and umbrella liability policy (cies); (xii) Ben's Soft Pretzels Franchising Corporation and its affiliates are named as additional insureds on all liability policies required by this subparagraph; (xiii) severability of interest and/or separation of insureds provisions must be included in the liability policies and an endorsement is required providing that the franchisee's insurance is primary with respect to any insurance policy carried by Ben's Soft Pretzels Franchising Corporation and its affiliates and any insurance maintained by Ben's Soft Pretzels Franchising Corporation or its affiliates is excess and non-contributing; (xiv) a waiver of subrogation endorsement must be obtained; and (xv) any other such insurance coverages or amounts as required by law or other agreement related to the Store.
If a franchisee fails to maintain the required insurance coverage, Bens Soft Pretzels has the right, but not the obligation, to procure the insurance and charge the costs, along with a reasonable fee, to the franchisee, payable immediately upon written notice. Bens Soft Pretzels may also modify the required minimum limits and require additional insurance coverages by providing written notice to reflect changes in relevant circumstances, industry standards, experiences in the Bens Soft Pretzels system, standards of liability, and higher damage awards. Franchisees operating a Mobile Store must maintain the insurance coverages required for the vehicle.
It is important for prospective Bens Soft Pretzels franchisees to consult with an insurance professional to determine the appropriate level of coverage needed for their specific circumstances, as the franchisor does not guarantee that the required or recommended insurance will be adequate to fully protect their assets. This ensures that franchisees are adequately protected against potential risks and liabilities associated with operating a Bens Soft Pretzels franchise.