What is the maximum deductible permitted for the comprehensive business automobile insurance for a Beverly Anns Cookie franchise?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance
You must obtain and maintain at your own expense and from a supplier rated "A-" or better by Best's Insurance Reports, the insurance coverage that we periodically require, and satisfy other insurancerelated obligations. You currently must have the following coverage:
- A. If you have employees, workers' compensation insurance in an amount not less than $500,000 or a higher amount as required by state statute or rule in the state in which your Beverly Ann's Business is located;
- B. Comprehensive business automobile insurance, including physical damage for the GRM/GRT in an amount of $144,451 or greater, except that an appropriate deductible clause (maximum $5,000 deductible) will be permitted. Also including any ancillary equipment and any other property used in the operation of Beverly Ann's;
- C. Comprehensive general liability insurance and product liability insurance coverage in such amounts and upon such terms as may generally be customary for a mobile cookie business located in your Protected Territory, but not less than $1,000,000, insuring both you and us against all claims, suits, obligations, liabilities and damage, including attorney fees, based upon or arising out of actual or alleged personal injuries or property damage relating to the use or condition of the Franchise;
- D. You must procure, maintain and provide evidence of automobile (truck) vehicle liability insurance covering the driving of the GRM/GRT, Hire/Non-Owned Autos and any Additional Equipment or vehicles used in your business in an amount of not less than $1,000,000; and
- E. Such additional insurance as may be required by the terms of any lease or mortga
Source: Item 8 — RESTRICTIONS ON SOURCES OF SERVICES AND PRODUCTS (FDD pages 29–32)
What This Means (2025 FDD)
According to Beverly Anns Cookie's 2025 Franchise Disclosure Document, franchisees are required to maintain comprehensive business automobile insurance, including physical damage coverage for the GRM/GRT (presumably a vehicle) of at least $144,451. However, the FDD specifies that an "appropriate deductible clause" is permitted, with a maximum deductible of $5,000. This means that in the event of a claim, the franchisee would be responsible for paying up to $5,000 before the insurance coverage kicks in.
This requirement has several implications for prospective Beverly Anns Cookie franchisees. First, it means they will need to budget for the cost of comprehensive business automobile insurance and ensure that the policy meets the franchisor's minimum coverage requirements. Second, they need to be aware of the $5,000 maximum deductible, as this represents a potential out-of-pocket expense in the event of an accident or damage to the GRM/GRT. Franchisees may want to consider a lower deductible to reduce their potential out-of-pocket costs, but this would likely result in higher insurance premiums.
It is common practice in franchising for franchisors to set minimum insurance requirements for their franchisees to protect the brand and the franchise system from potential liabilities. The specific coverage amounts and deductible limits can vary depending on the nature of the business and the perceived risks. Beverly Anns Cookie also requires worker's compensation, general liability, product liability, and vehicle liability insurance.
Prospective franchisees should carefully review the insurance requirements outlined in Item 8 of the Franchise Disclosure Document and consult with an insurance professional to determine the appropriate level of coverage for their specific circumstances. They should also compare quotes from different insurance providers to ensure they are getting the best possible rates. Kona Insurance, an affiliate of Beverly Ann's Cookie, is an approved supplier of comprehensive property and casualty insurance.