For how many months of income must Better Blend franchisees obtain Business Interruption Insurance?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
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- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business Interruption Insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written n
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 17–20)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, franchisees must secure Business Interruption Insurance that covers at least 12 months of income. This insurance is designed to protect the franchisee's revenue stream in the event of unforeseen circumstances that disrupt business operations, such as natural disasters, property damage, or other covered events.
Business Interruption Insurance is a standard requirement in many franchise systems, as it provides a safety net for both the franchisee and the franchisor. By ensuring that franchisees have sufficient coverage to sustain their business during interruptions, Better Blend aims to minimize financial losses and maintain the stability of its franchise network. The specific amount of coverage required—in this case, 12 months of income—is likely determined by Better Blend based on its assessment of potential risks and the time it might take for a franchise to recover from a significant disruption.
In addition to Business Interruption Insurance, Better Blend franchisees are also required to obtain other types of insurance, including property coverage, commercial general liability insurance ($1,000,000 single limit per occurrence and $2,000,000 aggregate limit), business automobile liability insurance ($1,000,000), and workers' compensation coverage as mandated by state law. These insurance policies collectively aim to protect the franchisee, Better Blend, and their affiliates from a range of potential liabilities and losses. Franchisees should carefully review the insurance requirements outlined in the Franchise Agreement and Brand Standards Manual to ensure full compliance and adequate protection.
Better Blend also requires that the insurance policies (excluding Workers Compensation) list Better Blend and its affiliates as additional insured parties and include a waiver of subrogation in their favor. Furthermore, the policies must be primary and non-contributing with any insurance carried by Better Blend or its affiliates, and stipulate that Better Blend receives 30 days' prior written notice of cancellation. These stipulations are designed to protect Better Blend's interests and ensure that the franchisee's insurance coverage is the primary source of compensation in the event of a claim.