Are Burneys Sweets More franchisees required to purchase business interruption insurance?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
Insurance. You are obligated to obtain and maintain, at your own expense, such insurance that we require from time to time from a nationally-recognized insurance company and at all times during the term of the Franchise Agreement maintain in force and pay the premiums for all types of public liability insurance with complete operations coverage, with limits of liability for bodily injury, personal injury and advertising injury of not less than $1,000,000 with limits of liability for property damage of not less than $1,000,000 in each occurrence, $1,000,000 of public and product liability coverage, and non-owned vehicle coverage of at least $500,000. You are also required to purchase business interruption insurance and must use the proceeds received from your business interruption insurance to pay Royalties during any period your business is interrupted by hurricanes, fires, or other disasters. From time to time in our sole discretion, we may increase or modify such limits of liability or require additional types of coverage, including coverage for cyber liability. The cost of this coverage will vary depending on the insurance carrier's charges, terms of payments and your history. All insurance policies must name us as an additional insured party. The Franchise Agreement also outlines the types, amounts, terms and conditions of insurance coverage required for your Shop, including, but not limited to, standards for underwriters of policies providing required insurance coverage; our protection and rights under such policies as an additional named insured; required or impermissible insurance contract provisions; assignment of
policy rights to us; periodic verification of insurance coverage that must be furnished to us; our right to obtain insurance coverage at your expense if you fail to obtain required coverage; our right to defend a claim; and similar matters relating to insured and uninsured claims.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–23)
What This Means (2025 FDD)
According to Burneys Sweets More's 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain business interruption insurance. This insurance must be secured from a nationally-recognized insurance company and maintained throughout the term of the Franchise Agreement.
The purpose of this business interruption insurance is specifically to cover royalty payments to Burneys Sweets More during any period the franchisee's business is interrupted due to events like hurricanes, fires, or other disasters. This means that even if a franchisee's location is temporarily closed due to unforeseen circumstances, they are still obligated to pay royalties to Burneys Sweets More, and the insurance proceeds are intended to facilitate these payments.
In addition to business interruption insurance, Burneys Sweets More franchisees must also maintain public liability insurance with complete operations coverage, including limits of liability for bodily injury, personal injury and advertising injury of not less than $1,000,000, property damage coverage of not less than $1,000,000 per occurrence, $1,000,000 of public and product liability coverage, and non-owned vehicle coverage of at least $500,000. Burneys Sweets More may increase or modify these coverage limits or require additional types of coverage, including cyber liability, at its discretion. The cost of insurance coverage will vary based on the insurance carrier's charges, payment terms, and the franchisee's history. Burneys Sweets More must be named as an additional insured party on all insurance policies.
The Franchise Agreement outlines further details regarding the required insurance coverage, including standards for underwriters, Burneys Sweets More's protection and rights as an additional named insured, required or impermissible insurance contract provisions, assignment of policy rights, periodic verification of coverage, Burneys Sweets More's right to obtain insurance at the franchisee's expense if they fail to do so, and Burneys Sweets More's right to defend a claim.