When must a Buona franchisee obtain Comprehensive or Commercial General Liability Insurance?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
hires any employees.
- (b) Employer's Liability Insurance, for employee bodily injuries, and deaths, with a limit of $500,000 each accident; and for employee disease with a limit of $500,000. Such coverage must be obtained on or before the date Franchisee hires any employees.
- (c) Comprehensive or Commercial General Liability Insurance, covering claims for bodily injury, death and property damage, including Premises and Operations, Independent Contractors, Products and Completed Operations, Personal Injury, Contractual, and Broad Form Property Damage Liability coverages, to be obtained by the date the Approved Location has been determined, with limits as f
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees must obtain Comprehensive or Commercial General Liability Insurance by the date the Approved Location has been determined. This insurance covers claims for bodily injury, death, and property damage, including Premises and Operations, Independent Contractors, Products and Completed Operations, Personal Injury, Contractual, and Broad Form Property Damage Liability coverages. The policy must have an Occurrence/Aggregate Limit of $1,000,000 for bodily injury, death, and property damage each occurrence and $2,000,000 for general aggregate; $2,000,000 for Products/Completed operations in the aggregate, $1,000,000 each occurrence; and $1,000,000 personal advertising injury.
This requirement ensures that both the franchisee and Buona are protected against potential liabilities arising from the operation of the franchised business. Determining the Approved Location is a critical step in the franchise process, as it signifies the commencement of activities that could expose the business to liability. Therefore, securing this insurance coverage by this date is essential for mitigating risks associated with the premises and operations.
The franchisee is responsible for ensuring that the insurance policy meets Buona's requirements and is maintained throughout the term of the franchise agreement. Failure to obtain and maintain the required insurance could result in Buona procuring the insurance on behalf of the franchisee, with the franchisee bearing the cost plus interest and administrative fees. This underscores the importance of adhering to the insurance requirements outlined in the franchise agreement to avoid potential financial burdens and maintain compliance with Buona's standards.
Prospective Buona franchisees should carefully review the insurance requirements outlined in the Franchise Agreement and consult with an insurance professional to ensure they obtain adequate coverage that meets Buona's specifications. Understanding the timing and coverage details is crucial for a smooth and compliant franchise operation.