Under what circumstances might Browns Chicken require different or additional kinds of insurance from its franchisees?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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 modification, cancellation, or expiration of such policy.
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, Browns Chicken has the right to modify the insurance requirements for its franchisees during the franchise term. Browns Chicken may increase the minimum coverage limits or mandate different or additional types of insurance to address factors such as inflation, the emergence of new risks, changes in laws or liability standards, higher damage awards, or other relevant changes in circumstances.
Currently, Browns Chicken requires franchisees to maintain several types of insurance, including comprehensive public and product liability insurance and motor vehicle liability insurance with a minimum liability protection of $1,000,000. Franchisees must also carry general casualty insurance for the replacement value of the store and its contents, employment practices liability insurance of no less than $500,000, worker's compensation insurance as required by law, and business interruption insurance.
Browns Chicken must be named as an additional insured on a primary basis on each insurance policy. Franchisees must also provide Browns Chicken with 10 days' prior written notice of any material modification, cancellation, or expiration of any insurance policy. This ensures that Browns Chicken is protected and informed about the franchisee's insurance coverage throughout the term of the franchise agreement.