What is the minimum Employment Practices Liability coverage required for a Browns Chicken franchise?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
trictions of this Section 15 shall not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the- counter market that represent one percent (1%) or less of the number of shares of that class of securities issued and outstanding.
16. INSURANCE.
During the term of the Franchise, Franchisee shall 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 the conduct of business by Franchisee pursuant to the Franchise, under one or more policies of insurance containing minimum liability protection of One Million Dollars ($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 re-establish 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
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees are required to maintain Employment Practices Liability insurance with a minimum coverage of $500,000. This insurance protects the franchisee against claims related to employment practices, such as discrimination, wrongful termination, or harassment. Browns Chicken also mandates that franchisees maintain other insurance policies, including comprehensive public and product liability insurance of $1,000,000, general casualty insurance, worker's compensation insurance, and business interruption insurance.
The franchisor, Browns Chicken, has the right to increase the minimum coverage limits or require different or additional kinds of insurance to reflect changes in circumstances such as inflation, new risks, or changes in the law. Browns Chicken must be named as an additional insured on a primary basis in each insurance policy, and Browns Chicken must receive ten days' prior written notice of any material modification, cancellation, or expiration of the policy.
For a prospective Browns Chicken franchisee, this means factoring in the cost of these insurance policies as part of their ongoing operating expenses. It is important to obtain quotes from multiple insurance carriers to ensure competitive rates and adequate coverage. Franchisees should also consult with an insurance professional to determine if additional coverage is necessary based on their specific circumstances and risk assessment.