What is the minimum amount of business interruption insurance required for a Buns On Fire franchise?
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 must maintain business interruption insurance. This insurance must be sufficient to cover twelve months of revenue. However, the minimum coverage amount required is $100,000.
Buns On Fire also requires that the franchisor is named as an additional insured and loss payee on the business interruption insurance policy. The amount for which Buns On Fire is named as loss payee must be equal 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 will be prorated for the shorter period.
The insurance policy must expressly state that the franchisor's interest will not be affected by any breach of the policy provisions by the franchisee, ensuring Buns On Fire's protection regardless of the franchisee's actions. This requirement protects Buns On Fire from financial losses in the event the franchisee's business is interrupted and unable to generate revenue.