What are the minimum Employer's Liability insurance limits required for Carls franchisees, and does this coverage extend to training programs?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
o the contents of the Development Guide develops, the master copy maintained by CJR at its principal offices shall control.
7. INSURANCE
Developer shall be responsible for all loss or damage arising from or related to Developer's development and operation of the Franchised Restaurant, and for all demands or claims with respect to any loss, liability, personal injury, death, prope
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, franchisees are required to maintain Employer's Liability insurance with limits of not less than $500,000. This coverage is in addition to Workers' Compensation insurance, which must be statutory as required by law in the state or locality where the franchised restaurant operates.
Notably, the Employer's Liability insurance coverage extends to all of the franchisee's employees who participate in any of the training programs described in Section 8 of the FDD. This means that if an employee is injured while participating in training, the franchisee's Employer's Liability insurance should cover related expenses and potential liabilities.
Carls requires that all insurance policies be written by an insurance company satisfactory to them and comply with the standards, specifications, coverages, and limits set forth in the Operations Procedures Manual (OPM) or otherwise provided to the franchisee in writing. Franchisees must ensure they understand and meet these requirements to avoid being in breach of their franchise agreement. Carls also has the right, but not the obligation, to procure insurance on behalf of the franchisee if the franchisee fails to maintain the required coverage, and charge the cost to the franchisee.