What does the security interest granted to the lender by Beverly Anns Cookie cover?
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 is required to carry adequate insurance coverage on financed equipment under the terms of their loan, the lender must be named as the loss payee against any loss, including fire, theft, and any other standard peril normally covered under a commercial policy. The coverage amount must not be less than the replacement cost of the equipment.
The insurance certificate must include the referenced agreement number, the name of the insurance company and policy number, the effective and expiration dates of coverage, and the borrower(s) listed must be named as the insured party. A description of the equipment covered, including serial numbers, must be listed on or attached to the Certificate of Insurance.
Beverly Anns Cookie requires that the lender be named as the loss payee/additional insured. The loan may not be funded until this information is received. This requirement protects the lender's interest in the financed equipment by ensuring that they are compensated if the equipment is damaged or lost. It also ensures that the franchisee maintains adequate insurance coverage, which is a standard requirement in commercial financing agreements.