What are the requirements for each insurance policy obtained by a Buns On Fire franchisee?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
We may require you to obtain insurance coverage for other risks or increase the required amount of coverage and require different or additional insurance during the Franchise Agreement term. Premiums will depend upon the insurance carrier's charges, terms of payment and your loss history. Each insurance policy must: (1) name us and our affiliates as an additional named insureds and contain a waiver of all subrogation rights against us; (2) provide for thirty (30) days' prior written notice to us of any material modification, cancellation, or expiration of the policy; (3) provide that coverage applies separately to each insured against whom a claim is brought; (4) contain no provision which limits coverage in the event of a claim by a party who is indemnified under the Franchise Agreement; (5) be primary; and (6) extend to and provide indemnity for all obligations assumed by you under the Franchise Agreement. You must obtain our approval of your insurance carriers and provide evidence of coverage as and when we may require.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees must adhere to specific requirements for their insurance policies. Buns On Fire may also require franchisees to obtain insurance coverage for other risks, increase the required coverage amount, or mandate different or additional insurance during the franchise agreement term. The premiums for these policies will depend on the insurance carrier's charges, payment terms, and the franchisee's loss history.
Each insurance policy must meet several conditions. Specifically, Buns On Fire and its affiliates must be named as additional insureds, and the policy must include a waiver of all subrogation rights against them. The policy must provide Buns On Fire with thirty days' prior written notice of any material modification, cancellation, or expiration. Coverage must apply separately to each insured party against whom a claim is brought and must not contain any provision that limits coverage in the event of a claim by a party indemnified under the Franchise Agreement. The policy must be primary and extend to and provide indemnity for all obligations assumed by the franchisee under the Franchise Agreement.
Furthermore, franchisees must obtain Buns On Fire's approval of their insurance carriers and provide evidence of coverage as required. This ensures that the insurance policies meet Buns On Fire's standards and protect the brand from potential liabilities. These requirements are typical in franchising, as franchisors need to protect their brand and ensure all franchisees maintain adequate coverage.