Under what conditions is flood insurance required for a Carls Jr. franchise?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Commercial Property insurance that extends coverage on a replacement cost basis for the Franchised Restaurant, business personal property (including electronic equipment, tenant improvements & betterments), and business income and extra expense for a minimum of 12 months or actual loss sustained to cover loss of profits, continuing expenses and loss of rents. Covered causes of loss should be "Special Form" or "All Risk" with coinsurance conditions not less than 80%. Flood insurance is also required for locations that reside in FEMA Flood Zones beginning with the letters "A" or "V." Earthquake insurance is also required for locations that reside in FEMA Seismic Design Categories "E" or "D."
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, flood insurance is mandated for franchised restaurant locations situated in specific FEMA (Federal Emergency Management Agency) Flood Zones.
Specifically, Carls Jr. franchisees must secure flood insurance if their restaurant resides in a FEMA Flood Zone that begins with the letters "A" or "V." This requirement is part of the broader commercial property insurance coverage that franchisees must maintain. This insurance should cover the replacement cost of the restaurant, business personal property (including electronic equipment, tenant improvements, and betterments), and business income and extra expenses for a minimum of 12 months, or actual loss sustained, to cover loss of profits, continuing expenses, and loss of rents.
The covered causes of loss should be "Special Form" or "All Risk" with coinsurance conditions not less than 80%. Additionally, earthquake insurance is required for locations in FEMA Seismic Design Categories "E" or "D".