Does Better Blend require franchisees to 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 are required to obtain several types of insurance, including Business Interruption Insurance. Specifically, Better Blend mandates that franchisees maintain Business Interruption Insurance covering at least 12 months of income. This insurance is intended to protect the franchisee's income stream should the business be temporarily unable to operate due to unforeseen circumstances such as fire, natural disasters, or other covered events.
In addition to Business Interruption Insurance, Better Blend requires franchisees to obtain other insurance coverages, including "Special" causes of loss coverage forms, Commercial General Liability insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 in aggregate, Business Automobile Liability insurance with a limit of not less than $1,000,000, and Workers Compensation coverage as required by state law.
Better Blend also stipulates certain conditions for these insurance policies. The policies (excluding Workers Compensation) must list Better Blend and its affiliates as additional insureds, include a waiver of subrogation in favor of Better Blend and its affiliates, be primary and non-contributing with any insurance carried by Better Blend or its affiliates, and provide Better Blend with 30 days' prior written notice of cancellation. These requirements ensure that Better Blend is protected from potential liabilities and disruptions to the franchise system.
Prospective franchisees should carefully review the insurance requirements outlined in the Franchise Agreement and Brand Standards Manual to understand the full scope of coverage needed and the associated costs. It is advisable to consult with an insurance professional to ensure compliance with Better Blend's requirements and to obtain adequate protection for their business.