Does a Buns On Fire franchisee need to obtain worker's compensation insurance?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
plans to, negotiate purchase agreements with suppliers.
Insurance
You must obtain and maintain at your own expense the insurance coverage that we and your landlord (if applicable) periodically require, and you must meet the other insurance-related obligations in the Franchise Agreement. Currently, we require you to maintain the following coverages:
- ( 1 ) comprehensive general liability insurance for bodily injury, death and property damage caused by your operation of the Franchise Business, including employment practices liability coverage and contractual liability coverage, (not less than $1,000,000 each occurrence for bodily injury, death or property damage; not less than $1,000,000 each occurrence for personal and advertising injury; and $2,000,000 general aggregate); all risk property and casualty insurance, including fire coverage in an amount equal to the replacement cost value of cost of build out, improvements & betterments, equipment, furniture, fixtures & inventory;
- (2) business interruption insurance in sufficient amounts to cover 12 months of revenue but not less than $100,000 per year;
- (3) products liability and completed operation insurance (minimum coverage of $2,000,000);
- (4) worker's compensation insurance state disability insurance and all other insurance required by law;
- (5) Cyber risk policy;
- (6) commercial umbrella liability insurance with limits which bring the total of all primary underlying coverages (comprehensive general liability, business interruption, products liability and employers' liability) to not less than $5,000,000 total limit liability. This umbrella liability will provide at a minimum those coverages and endorsements required in the underlying policies; and
- (7) if you use a motor vehicle in the operation of your Franchise Business, business automotive coverage, including owned, hired, and
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, franchisees are required to obtain worker's compensation insurance. Specifically, franchisees must maintain worker's compensation insurance, state disability insurance, and all other insurance required by law. This requirement is part of a broader set of insurance obligations that Buns On Fire imposes on its franchisees.
In addition to worker's compensation, Buns On Fire franchisees must also carry comprehensive general liability insurance (not less than $1,000,000 each occurrence for bodily injury, death or property damage; not less than $1,000,000 each occurrence for personal and advertising injury; and $2,000,000 general aggregate), all risk property and casualty insurance, business interruption insurance (not less than $100,000 per year), products liability and completed operation insurance (minimum coverage of $2,000,000), a cyber risk policy, commercial umbrella liability insurance (with limits which bring the total of all primary underlying coverages to not less than $5,000,000 total limit liability), and business automotive coverage (minimum coverage $1,000,000) if a motor vehicle is used in the operation of the franchise business.
Buns On Fire also retains the right to modify these insurance requirements during the term of the Franchise Agreement, potentially requiring franchisees to obtain coverage for other risks or increase the required coverage amounts. The premiums for these policies will depend on the insurance carrier's charges, terms of payment, and the franchisee's loss history. Franchisees must also ensure that Buns On Fire and its affiliates are named as additional insureds on each policy and that the policies meet other specific requirements outlined in the Franchise Agreement.
It is common practice in the franchise industry for franchisors to mandate various insurance coverages to protect both the franchisee's business and the overall brand. Worker's compensation insurance is a standard requirement, as it protects employees in the event of work-related injuries or illnesses, and ensures that the franchisee complies with state and federal labor laws.