When a Carls franchise is undergoing construction, leasehold improvements, renovation, refurbishment, or remodeling, what types of insurance coverage must the Developer's general contractor maintain?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
nd in the aggregate. Coverage shall apply per location, including coverage for contractual liability, broad form property damage, personal and advertising injury, product liability and completed operations, not to exclude food-borne illness, as well as Damage to Rented Premises coverage with limits not less than $100,000.
- (2) Automobile Liability coverage, including owned, leased, non-owned and hired vehicles, with a combined single limit not less than $1,000,000 per accident and additional liability coverage as needed for delivery services. This may be included as part of a package policy.
- (3) Workers' Compensation, statutory as required by law, and Employer's Liability insurance with limits not less than $500,000, and such other insurance as may be required by the state or locality in which the Franchised Restaurant is operated. This coverage shall also be in effect for all of Developer's employees who participate in any of the training programs described in Section 8.
The required limits set forth in Section 7(1)-(3) above may be satisfied through a combination of Primary and Umbrella/Excess Liability coverage. If satisfied through an Umbrella/Excess Liability
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, when a Carls franchise is undergoing construction, leasehold improvements, renovation, refurbishment, or remodeling, the developer's general contractor must maintain specific insurance coverage. This includes Commercial General Liability insurance (with products liability and independent contractors coverage), Automobile Liability coverage for owned, leased, hired, and non-owned vehicles, and Builder's Risk, each with limits no less than $1,000,000.
In addition to the coverages listed above, the contractor must also maintain Workers' Compensation and Employer's Liability insurance as required by state law. Carls (referred to as CJR in the document) is to be named as an additional insured on these policies.
Carls retains the right to regulate the types, amounts, terms, and conditions of insurance coverage required for the franchised restaurant. This includes specifying standards for underwriters, ensuring Carls's protection as an additional insured, setting insurance contract provisions, and requiring periodic verification of coverage. The developer will receive written notice of any such modifications and must promptly comply. These stipulations ensure that both the franchisee and Carls are protected against potential liabilities and losses during the construction and renovation phases.