For Buns On Fire, how many months of revenue should the business interruption insurance cover?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
y, including buildout, improvement and betterments, equipment , furniture, fixtures and inventory;
(iii.) Liquor liability coverage in amounts identified in the Confidential Operations Manual or an addendum thereto if alcohol will be served.
(iv.) Employer's Liability, Workers' Compensation, and such other insurance as may be required by statute or rule of the state or locality in which Franchisee's Buns on Fire is located and operated;
(v.) Business interruption insurance in sufficient amounts to cover twelve (12) months of revenue but not less than $100,000. Franchisor shall be named as an additional insured and loss payee in an amount equa
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees are required to maintain business interruption insurance. This insurance must be sufficient to cover twelve months of revenue, with a minimum coverage of $100,000.
Buns On Fire also requires that the franchisor, SMYA Ventures LLC, be named as an additional insured and loss payee. The coverage amount for the franchisor is equivalent to the royalties that would have been paid based on the gross revenue of the franchised business for the preceding twelve-month period. If the business has not been in operation for twelve months, this amount is prorated for the shorter period.
This insurance policy must expressly state that the franchisor's interests will not be affected by any breach of the policy provisions by the franchisee. This requirement ensures that Buns On Fire is protected even if the franchisee violates the terms of the insurance policy. This protects the franchisor's revenue stream in the event of business interruption at the franchise location.