When must a Buona franchisee obtain Umbrella/Excess Liability Insurance?

According to Buona's 2025 Franchise Disclosure Document, a franchisee must obtain Umbrella/Excess Liability Insurance by the date the Approved Location has been determined. This insurance must be on a Follow Form basis with a limit of $5,000,000 per occurrence and in the aggregate with Employer's Liability, General Liability, Auto Liability and, if applicable, Liquor Liability.

This requirement means that before a Buona franchisee can finalize their location and begin operations, they must secure this significant level of liability coverage. The $5,000,000 limit indicates the potential for substantial risk and the need for comprehensive protection against various liabilities. The Follow Form basis means the umbrella policy follows the terms and conditions of the underlying primary policies (Employer's Liability, General Liability, Auto Liability, and Liquor Liability), providing an additional layer of coverage once the primary policy limits are exhausted.

For a prospective franchisee, this insurance requirement represents a notable cost and administrative burden. Securing such a high level of coverage may require shopping around for the best rates and ensuring that the policy aligns with Buona's specific requirements. Failure to obtain this insurance by the deadline could delay the opening of the franchise location.

It is common in the franchise industry for franchisors to mandate specific insurance coverage to protect both the franchisee and the brand from potential liabilities. The specific types and amounts of coverage can vary widely depending on the nature of the business and the perceived risks. The franchisee should carefully review the insurance requirements and factor the costs into their overall investment decision.