Under what conditions can Black Bear Diner obtain insurance coverage on behalf of a franchisee?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
You must purchase insurance from a carrier with a performance rating of at least A-/VII in Best's Insurance Guide. All insurance policies must name BBDI LLC, its parents and affiliated entities as additional insured parties and include a waiver of subrogation. Your insurance must apply on a primary and non-contributory basis. You must furnish us with such evidence of insurance coverage at least 10 days prior to beginning operations and on an annual basis thereafter as well as proof of payment of premiums as we may request. Your insurance policies must provide for thirty days' prior written notice to us of any material modifications. If you fail or refuse to maintain any required insurance coverage, or to furnish satisfactory evidence thereof, we, at our option and in addition to our other rights and remedies hereunder, may obtain such insurance coverage on your behalf. If we do so, you must fully cooperate with us in our effort to obtain such insurance policies and pay us any costs and premiums we incur.
As a supplement to your required insurance coverage, we currently maintain a system-wide policy providing Restaurant Recovery Insurance, underwritten by Tokio Marine HCC-Specialty Group. The policy for Restaurant Recovery Insurance provides certain specific coverages and reimbursements to qualified Franchised Restaurants resulting from incidents involving accidental contamination and malicious tampering of food products. In most cases we will be able to offer a basic policy to you at no additional cost. In the event you have the same or similar coverages or wish to maintain higher limits or lower deductibles than are offered, you are not required to make application for coverage and may elect to procure your own policy.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, if a franchisee fails or refuses to maintain the required insurance coverage or provide satisfactory evidence of such coverage, Black Bear Diner has the option to obtain the necessary insurance on the franchisee's behalf. In such a case, the franchisee is obligated to fully cooperate with Black Bear Diner in securing the insurance policies and must pay all associated costs and premiums incurred by Black Bear Diner.
Black Bear Diner also maintains a system-wide policy providing Restaurant Recovery Insurance, underwritten by Tokio Marine HCC-Specialty Group, as a supplement to the franchisee's required insurance. This policy offers specific coverages and reimbursements to qualified franchised restaurants for incidents involving accidental contamination and malicious tampering of food products. In most cases, a basic policy will be offered at no additional cost to the franchisee.
However, franchisees are not required to accept this coverage if they already have similar coverage or prefer to maintain higher limits or lower deductibles. In such instances, the franchisee can opt to procure their own policy instead of the one offered by Black Bear Diner. The franchisee must purchase insurance from a carrier with a performance rating of at least A-/VII in Best's Insurance Guide. All insurance policies must name BBDI LLC, its parents and affiliated entities as additional insured parties and include a waiver of subrogation. The insurance must apply on a primary and non-contributory basis. The franchisee must furnish evidence of insurance coverage at least 10 days prior to beginning operations and annually thereafter, as well as proof of payment of premiums as Black Bear Diner may request. The insurance policies must provide for thirty days' prior written notice to Black Bear Diner of any material modifications.