What are the obligations of a Burros Fries franchisee relating to insurance?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
able; review advertising, product, supply, kitchen equipment, vendor and/or supplier approval requests; andadminister the System Advertising Fund.
13. OBLIGATIONS OF FRANCHISEE RELATING TO INSURANCE
A. Overall Coverage Required
Before Franchisee opens a Burros & Fries Franchised Business, Franchisee must purchase insurance coverage from a responsible carrier with a performance rating of A or higher as rated in the most recent edition of Best Insurance Reports (or comparable criteria as we may specify) and Franchisee must maintain such insurance throughout the duration of the initial term of the Franchise Agreement and any renewal terms. Franchisee shall list us as additional insured on all its insurance policies. Franchisee will procure and maintain general liability insurance with a minimum policy limit of $2,000,000 per occurrence and $4,000,000 aggregate (this policy should include general tort, premises damage, personal advertising injury and product liability insurance which covers Franchisee for damages that result in injury from products Franchisee distributes). Plus, property and casualty insurance with a minimum policy limit of $2,000,000 or an amount specified by the us.
Franchisee must also procure and maintain "All Risks" or "Special Form" insurance (coverage for the full cost of replacement of the premises and all other property); employer liability insurance, automobile liability insurance with coverage of owned and hired vehicles with minimum coverage in amounts not less than $100,000 combined single limit for bodily and property damage (or what is in accordance with Franchisee's state guidelines); business interruption insurance to fully insure loss of earnings for a period of one
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees have several insurance obligations to fulfill before opening and throughout the term of the Franchise Agreement. Burros Fries requires franchisees to purchase insurance coverage from a responsible carrier with a performance rating of A or higher, as rated in the most recent edition of Best Insurance Reports, or comparable criteria as specified by Burros Fries. Franchisees must maintain this insurance throughout the initial term and any renewal terms of the Franchise Agreement and must list Burros Fries as an additional insured on all insurance policies.
Specifically, franchisees must secure and maintain general liability insurance with a minimum policy limit of $2,000,000 per occurrence and $4,000,000 aggregate. This policy should include general tort, premises damage, personal advertising injury, and product liability insurance, covering damages resulting from injury from products the franchisee distributes. Additionally, franchisees need property and casualty insurance with a minimum policy limit of $2,000,000 or an amount specified by Burros Fries.
Furthermore, Burros Fries franchisees must also procure and maintain "All Risks" or "Special Form" insurance, which covers the full cost of replacement of the premises and all other property. They must also have employer liability insurance, automobile liability insurance with coverage of owned and hired vehicles with minimum coverage in amounts not less than $100,000 combined single limit for bodily and property damage, or what is in accordance with the franchisee's state guidelines. Business interruption insurance is required to fully insure loss of earnings for a period of one-hundred and eighty (180) days or longer as may specify, along with statutory workers' compensation insurance with limits of greater than $100,000 or the minimum limits required by law.
These insurance requirements ensure that both the franchisee and Burros Fries are protected against potential liabilities and losses, which is a common practice in franchising to safeguard the brand and the individual business. Franchisees should factor in these insurance costs when evaluating the overall investment and operational expenses of a Burros Fries franchise.