Can Burneys Sweets More increase or modify the required insurance limits of liability?
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 maintain specific insurance coverage during the term of the Franchise Agreement. This includes public liability insurance with limits of liability for bodily injury, personal injury, and advertising injury of not less than $1,000,000, as well as property damage coverage of not less than $1,000,000 per occurrence. Additionally, franchisees must have $1,000,000 of public and product liability coverage and non-owned vehicle coverage of at least $500,000. Franchisees are also required to purchase business interruption insurance and use the proceeds to pay royalties during any business interruption caused by events like hurricanes or fires.
Burneys Sweets More retains the right to modify these insurance requirements. Specifically, the FDD states that Burneys Sweets More may, at its sole discretion, increase or modify the 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 Burneys Sweets More as an additional insured party.
This provision grants Burneys Sweets More significant control over the insurance requirements for its franchisees. A prospective franchisee should be aware that the initial insurance costs could increase during the term of the agreement if Burneys Sweets More chooses to exercise this right. 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. Therefore, it is crucial for potential franchisees to factor in the potential for increased insurance costs when evaluating the financial feasibility of the franchise.