When must a Buona franchisee obtain Employer's Liability Insurance?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
regulation of the state or locality in which the Franchised Business is located; Franchisor reserves the right to require that owners and executive officers not be excluded from this coverage. Such coverage must be obtained on or before the date Franchise
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee must obtain Employer's Liability Insurance on or before the date they hire any employees. This insurance covers employee bodily injuries and deaths, with a limit of $500,000 for each accident, and for employee disease, also with a limit of $500,000.
This requirement ensures that Buona franchisees are financially protected against potential liabilities arising from employee injuries or illnesses during their employment. It also protects the Buona brand from potential legal issues. Failing to secure this insurance by the time employees are hired would constitute a breach of the franchise agreement and could expose the franchisee to significant financial risk.
It is standard practice in the franchise industry to require franchisees to maintain adequate insurance coverage, including employer's liability insurance, to protect both the franchisee and the franchisor from potential liabilities. The specific coverage amounts and terms can vary depending on the nature of the business and the applicable state laws. Buona's requirements appear to align with this standard practice, providing a baseline level of protection for its franchisees and the brand.