What is the requirement for insurance demanded by Buns On Fire that differs from the initial coverage requirements?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
other property in which the Franchisor may have an interest, with a replacement cost clause attached, agreed amount endorsement equal to one hundred (100%) percent replacement the value of the property, 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 equal to the royalties that would have been paid based on the Gross Revenue of the Franchised Business for the preceding twelve (12) month period, or prorated for such shorter period (if the Franchised Business has not been in operation for twelve (12) months), and shall expressly provide that any interest of same therein shall not be affected by any breach of Franchisee of any policy provisions for which such certificates evidence coverage; and
(vi.) Products liability and completed operation insurance; and
(vii.) Any other insurance coverage as required by the State, Federal or local municipality in which the franchised premises is located, as required by Franchisor, or as required by the lease for the Franchised Business premises.
Franchisee may, with the prior written c
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 FDD, Buns On Fire requires franchisees to maintain several types of insurance coverage. These include employer's liability, workers' compensation, business interruption insurance, products liability, and completed operation insurance. Additionally, franchisees must carry any other insurance coverage mandated by state, federal, or local municipalities, as required by Buns On Fire, or as required by the lease for the franchised business premises.
A specific requirement for Buns On Fire franchisees is business interruption insurance. This insurance must be in an amount sufficient to cover twelve months of revenue, but not less than $100,000. Buns On Fire must be named as an additional insured and loss payee in an amount 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 is prorated. The policy must expressly provide that Buns On Fire's interest will not be affected by any breach of the franchisee regarding policy provisions.
Furthermore, the insurance coverage must extend to the acts or omissions of everyone performing services at the franchised business and protect against all acts of persons who patronize the business. The policy must also contain a waiver of subrogation against Buns On Fire. Franchisees may elect to have reasonable deductibles in connection with the required coverage, but only with the prior written consent of Buns On Fire.