Is excess liability insurance a mandatory requirement for Browns Chicken franchisees?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ises or sublease them to another party.
Insurance.
During the term of the Franchise, you must maintain in force, under policies of insurance issued by carriers approved by Brown: (1) comprehensive public and product liability insurance and motor vehicle liability insurance (including but not limited to hired and non-owned coverage) against claims brought during or after the term of the Franchise for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the Store or otherwise in conjunction with your conduct of business pursuant to the Franchise, under one or more policies of insurance containing minimum liability protection of $1,000,000 combined single limit; (2) general casualty insurance, including fire and extended coverage, vandalism, and malicious mischief insurance and plate glass and general theft insurance, for the replacement value of the Store and its contents; (3) Employment Practices Liability of no less than $500,000; (4) workmen's compensation insurance as required by law; and (5) business interruption insurance for a period adequate to reestablish normal business operations. Brown may from time to time increase the minimum limits of coverage required under such insurance policies and require different or additional kinds of insurance, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances. Each insurance policy must name Brown's Chicken, LLC 55 East Park Boulevard, Villa Park, Illinois 60181 as additional insured on a primary basis, and shall provide for 10 days prior written notice to Brown of any material
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees must maintain several types of insurance coverage during the term of the franchise. These include comprehensive public and product liability insurance and motor vehicle liability insurance with a minimum liability protection of $1,000,000 combined single limit. Franchisees also need to have general casualty insurance for the replacement value of the store and its contents, Employment Practices Liability of no less than $500,000, workmen's compensation insurance as required by law, and business interruption insurance.
While Browns Chicken specifies these mandatory insurance types and minimum coverage amounts, the franchisor retains the right to modify these requirements. Browns Chicken may increase the minimum limits of coverage or require different or additional kinds of insurance, including excess liability insurance. These changes can be made to reflect factors such as inflation, new risks, changes in law, higher damage awards, or other relevant changes in circumstances.
Although excess liability insurance is not explicitly mandated at the outset, Browns Chicken reserves the right to require it in the future. Therefore, prospective franchisees should be prepared for the possibility of needing to obtain excess liability insurance during the term of their franchise agreement. It is important to maintain open communication with Browns Chicken regarding insurance requirements to ensure compliance and adequate protection for the business.