What is the Beverly Anns Cookie borrower's responsibility regarding the equipment order?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
If this box is marked, then under the terms of your Loan, you are required to carry adequate insurance coverage on financed equipment. Your insurance certificate is required prior to us funding your vendor. Homeowners Policies will not cover commercial financing. YOUR LOAN MAY NOT BE FUNDED UNTIL WE RECEIVE THIS INFORMATION.
Please provide a Certificate of Insurance showing the following:
- Above referenced Agreement #
- Name of the Insurance Company and Policy Number
- Effective and Expiration Date of Coverage.
- INSURED PARTY: The Borrower(s) listed above must be named as Insured.
- PHYSICAL DAMAGE INSURANCE: Lender must be named Loss Payee against any loss including fire, theft and any other standard peril normally covered under a commercial policy for an amount not less than the replacement cost of the equipment.
- LENDER AS LOSS PAYEE/ADDITIONAL INSURED
- DESCRIPTION OF EQUIPMENT: A description of equipment covered (including serial numbers) must be listed on or attached to the Certificate of Insurance.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, if a franchisee obtains a loan to finance equipment, they are required to carry adequate insurance coverage on the financed equipment. The franchisee must provide a certificate of insurance before the funding of the vendor. Standard homeowner's insurance policies are insufficient for commercial financing. The loan may not be funded until this information is received.
The certificate of insurance must include the loan agreement number, the name of the insurance company, the policy number, and the effective and expiration dates of coverage. The borrower must be listed as the insured party. The lender must be named as the loss payee for physical damage insurance, covering losses such as fire, theft, and other standard perils, for an amount not less than the equipment's replacement cost.
Additionally, the lender must be listed as the loss payee or additional insured. The certificate of insurance must include a description of the equipment covered, including serial numbers, either on the certificate itself or as an attachment. This requirement ensures that the lender is protected against potential losses or damage to the financed equipment, and that the franchisee has adequate coverage to meet the terms of the loan agreement.