What are the requirements for insurance coverage that a Burger King franchisee must maintain?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
or obligate BKC in any way nor shall Franchisee represent that it has any right to do so. BKC shall have no control over the terms and conditions of employment of Franchisee's employees.
In all public records and in Franchisee's relationship with other persons, on stationery, business forms and checks Franchisee shall indicate independent ownership of the Franchised Restaurant and that it is operated under a Franchise granted by BKC.
Franchisee shall exhibit at the Franchised Restaurant in such places as may be designated by BKC, a notification that the Franchised Restaurant is operated by an independent operator and not by BKC.
12. UNFAIR COMPETITION
Franchisee acknowledges the uniqueness of the BURGER KING System and that BKC is making its knowledge, know-how and expertise available to it for the purpose of operating the Franchised Restaurant. Franchisee agrees that it would be an unfair method of competition for Franchisee to use or duplicate or to allow others to use or duplicate any of the knowledge, know-how and expertise received from BKC for any use other than for the operation of franchised BURGER KING Restaurants. Franchisee, therefore, warrants that during the Term of this Agreement, it will utilize its best and continuing efforts to promote and develop the business at the Franchised Restaurant and during the Term hereof and at all times thereafter will not directly or indirectly engage in the operation of any restaurant, other than the Franchised Restaurant and other BURGER KING Restaurants franchised from BKC, which utilizes or duplicates the BURGER KING System, any trade secrets of BKC, the BURGER KING Marks or the present or any former BURGER KING Current Image.
13. INSURANCE; INDEMNIFICATION
A. Insurance
Franchisee shall procure, or cause to be procured, prior to the opening of the Franchised Restaurant, and maintain, or cause to be maintained, in full force and effect from and following the Commencement Date and during the Term of this Agreement, at the Franchisee's expense, an insurance policy or policies protecting Franchisee and BKC (and any other entity that BKC reasonably requests) and their respective officers, directors, partners, agents and employees, against any loss, liability or expense.
B. Specific Coverage
(1) Such policy or policies shall be written by an insurance company approved in writing by BKC in accordance with the standards and specifications set forth by BKC in the MOD Manual or otherwise in writing, and shall include, at a minimum (except as additional coverages and higher policy limits that may reasonably be specified for BKC franchisees from time to time by BKC in the MOD Manual or otherwise in writing), the following:
(i) commercial general liability insurance with a primary and excess limit of not less than Five Million Dollars ($5,000,000) per occurrence inclusive of bodily injury, death, personal injury, property damage, non-owned automobile, blanket contractual and products and completed operations liability, with the annual aggregate liability limit to be maintained on the commercial general liability insurance (which can be achieved through a combination of primary and excess annual aggregate liability limits) based on the number of BURGER KING Restaurants owned by Franchisee and its Affiliates as follows: (1) for 1-10 Restaurants, an annual aggregate liability limit of not less than Five Million Dollars ($5,000,000) per year, (2) for 11-50 Restaurants, an annual aggregate liability limit of not less than Ten Million Dollars ($10,000,000) per year, and (3) for more than 50 Restaurants, an annual aggregate liability limit of not less than Twenty Million Dollars ($20,000,000) per year. Such insurance shall name BKC and any other entity that BKC acting reasonably requests as additional insureds. The addition of BKC and any other entity as additional insureds must be effectuated through an endorsement to Franchisee's insurance policy which shall be effectuated through the following language: "BKC, its parent company, its officers, employees, directors, and Affiliates", without any language limiting coverage. For purposes of this Section 13(B)(1)(i) only, if the Managing Owner of Franchisee is the Managing Owner of another BURGER KING franchisee, such franchisee shall be considered an Affiliate of Franchisee;
- (ii) automobile liability insurance on all owned and/or leased vehicles, with a combination of primary and excess limits of not less than One Million Dollars ($1,000,000.00);
- (iii) "all risks" property insurance, (including business interruption coverage with an indemnity period of at least 12 months), on the Premises and property of every description and kind owned by Franchisee or for which Franchisee is legally liable, or which is installed by or on behalf of Franchisee within the Premises including stock in trade, furniture, equipment, partitions, trade fixtures and leasehold improvements, all in an amount not less than the full replacement cost thereof. Such insurance shall name BKC and any other entity that BKC acting reasonably requests as a loss payee as its interest may appear and shall include a waiver of subrogation in favor of BKC and any other loss payee;
- (iv) broad form Boiler and Machinery insurance covering all boilers, pressure vessels and HVAC equipment within the Premises in an amount not less than the full replacement cost thereof. Such insurance shall name BKC and any other entity that BKC acting reasonably requests as a loss payee as its interest may appear and shall include a waiver of subrogation in favor of BKC and any other loss payee; and
- (v) such other insurance and in such amounts as reasonably may be required by BKC for its own and Franchisee's protection.
- (2) Franchisee's obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by BKC, nor shall Franchisee's performance of that obligation relieve it of liability under the indemnity provisions set forth in this Agreement. All insurance maintained by Franchisee shall be primary and shall not call into contribution any insurance maintained by BKC.
C. Evidence of Insurance
From and following the Commencement Date, at BKC's reasonable request, evidence of insurance in the form of a certificate or certificates of insurance showing compliance with the foregoing requirements shall be furnished by Franchisee to BKC or its designee.
Source: Item 22 — CONTRACTS (FDD pages 125–127)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, franchisees must procure and maintain specific insurance policies from the commencement date of the agreement and throughout its term. These policies are designed to protect both the franchisee and Burger King against potential losses, liabilities, and expenses. The insurance must be written by a company approved by Burger King and adhere to the standards outlined in the MOD Manual or other written specifications.
The required insurance coverage includes commercial general liability insurance with a primary and excess limit of at least $5,000,000 per occurrence, covering bodily injury, death, personal injury, property damage, non-owned automobile use, blanket contractual obligations, and products and completed operations liability. The annual aggregate liability limit for this insurance varies based on the number of Burger King restaurants the franchisee and its affiliates own: $5,000,000 for 1-10 restaurants, $10,000,000 for 11-50 restaurants, and $20,000,000 for more than 50 restaurants. Burger King and any other entities they reasonably request must be named as additional insureds.
Additional insurance requirements include automobile liability insurance with combined primary and excess limits of no less than $1,000,000 for all owned or leased vehicles. Franchisees must also carry "all risks" property insurance, including business interruption coverage for at least 12 months, covering the premises and all property owned by the franchisee or for which they are legally liable, in an amount not less than the full replacement cost. This insurance must name Burger King as a loss payee and include a waiver of subrogation. Furthermore, broad form Boiler and Machinery insurance is required for all boilers, pressure vessels, and HVAC equipment, also naming Burger King as a loss payee with a waiver of subrogation. Burger King can also reasonably require other insurance types and amounts for additional protection.
Franchisees must provide Burger King with evidence of insurance compliance upon request, including certificates of insurance. These certificates must state that the policies will not be canceled or materially altered without at least 30 days' prior written notice to Burger King. Original copies of all insurance policies and proof of payment must be submitted promptly upon request. All insurance must be maintained with insurers having a minimum A. M. Best A(X) rating or a Standard & Poor's Rating of A. Failure to maintain the required insurance can result in a notice to cure, with a short five-day window to correct the default, otherwise Burger King has the right to terminate the agreement.