What is the administrative fee Buns On Fire charges if they procure insurance on my behalf?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
bona fide refunds actually paid to customers.
| between 1% and 2% of Gross Revenue. | |||
|---|---|---|---|
| Insurance | Cost of procuring insurance for you. | If incurred. | If you do not provide proof of insurance for your Franchise Business, we may procure it on your behalf and charge you the cost of procuring this insurance, including an administrative fee of $2,500 payable to us. |
| Transfer Fee | 50% of the then current initial franchise fee. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, if a franchisee fails to provide proof of insurance for their franchise business, Buns On Fire has the option to procure insurance on the franchisee's behalf. In this case, Buns On Fire will charge the franchisee the cost of procuring the insurance, in addition to an administrative fee of $2,500. This fee is payable directly to Buns On Fire.
This policy is fairly standard in franchising, as franchisors need to ensure that all franchise locations maintain adequate insurance coverage to protect the brand and the system as a whole. The $2,500 administrative fee could be considered a penalty for non-compliance, as it incentivizes franchisees to secure their own insurance independently.
Prospective franchisees should factor this potential cost into their operating budget and ensure they understand the insurance requirements outlined in the Franchise Agreement. Maintaining proper insurance is not only a requirement but also a crucial aspect of risk management for any business owner. Franchisees should prioritize securing their own insurance to avoid the administrative fee and maintain control over their insurance coverage and costs.