What A.M. Best rating must the insurance carrier have for Buff City Soap franchisees?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
struments transferring good and merchantable title to the Operating Assets, Makery and/or Premises purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to Franchisor), with all sales and other transfer taxes paid by Franchisee (provided, if Franchisee cannot deliver clear title to all of the purchased assets, the closing of the sale will be accomplished through an escrow);
- B. instruments transferring all approvals, licenses and/or permits of the Makery which may be assigned or transferred, with appropriate consents, if required;
- C. instruments transferring fee simple or leasehold interest in the Premises and improvements thereon, subject to any necessary approvals from third-party landlords or financial institutions or banks; and
- D. general releases, in form satisfactory to Franchisor, from Franchisee and its Principals, of any and all claims against Franchisor, its Affiliates, and its officers, directors, employees, agents, successors and assigns.
EXHIBIT I
INSURANCE REQUIREMENTS
The insurance requirements described below are for a single Makery. If Franchisee owns multiple Makeries, Franchisee must meet the insurance requirements below for each Makery and "per Makery location" aggregate limits when multiple Makeries are insured under single comprehensive general liability policy (capitalized terms not defined in this Exhibit I have the meanings set forth in the Agreement). All insurance policies must:
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- be issued by a responsible carrier or carriers that has received and maintains an A.M. Best rating of at least A-VI (or comparable ratings from a reputable insurance rating service, in the event such A.M. Best ratings are discontinued or materially altered), and otherwise approved by Franchisor;
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- contain a waiver of subrogation provision;
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- other than Workers' Compensation, name Buff City Soap Franchising, LLC as an additional insured on a primary basis for operations of BCS Makery. If the additional insured has other insurance applicable to a loss, it will be on an excess or contingent basis. The additiona
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, franchisees must secure insurance policies from carriers with a minimum A.M. Best rating of A-VI. This requirement ensures that the insurance provider is financially stable and capable of meeting potential claims. If A.M. Best ratings are discontinued or significantly altered, Buff City Soap will approve comparable ratings from another reputable insurance rating service.
All insurance policies obtained by Buff City Soap franchisees must include a waiver of subrogation provision. Additionally, Buff City Soap Franchising, LLC must be named as an additional insured on a primary basis for the operations of the BCS Makery, with the exception of Workers' Compensation. This protects Buff City Soap from potential liabilities arising from the franchisee's operations. The insurance coverage for Buff City Soap as an additional insured will be on an excess or contingent basis, ensuring that their coverage is not reduced by any other existing insurance.
The insurance policies must not have any deductible, self-insured retention, self-funded retention, or any similar provision exceeding $25,000 without the franchisor's prior written consent. The coinsurance percentage must not be less than 80%. The policies must also provide Buff City Soap with 30 days' prior written notice of any material modification, cancellation, or expiration. These stipulations are in place to ensure that adequate insurance coverage is maintained throughout the franchise agreement, protecting both the franchisee and the franchisor from potential financial losses.
These insurance requirements are designed to protect both the franchisee and Buff City Soap from potential liabilities and financial losses. Franchisees should carefully review these requirements with their insurance providers to ensure full compliance and adequate coverage. Failing to meet these insurance standards could result in a breach of the franchise agreement and potential legal or financial repercussions.