What specific flood insurance coverage is required for a Carvel franchise location that resides in FEMA Flood Zones beginning with the letters 'A' or 'V'?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Currently, you must obtain and maintain the following coverage:
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- Business Property Insurance that extends coverage on a replacement cost basis for business personal property including electronic equipment, tenant improvements and betterments, and business income and extra expense, with covered causes of loss as "Special" or "All Risk" with coinsurance conditions not less than 80%, and further, if you are in a location that resides in FEMA Flood Zones beginning with the letters "A" or "V", coverage for Flood;
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if a Carvel franchise location resides in a FEMA Flood Zone beginning with the letters "A" or "V", the franchisee must obtain flood insurance coverage as part of their business property insurance.
This flood insurance is a component of the broader Business Property Insurance, which also includes coverage for business personal property, electronic equipment, tenant improvements, betterments, business income, and extra expenses. The business property insurance must extend coverage on a replacement cost basis and have covered causes of loss as "Special" or "All Risk" with coinsurance conditions not less than 80%.
For a prospective Carvel franchisee, this means that if the location they are considering is in a designated flood zone, they will need to factor in the cost of flood insurance in addition to the standard business property insurance. Failing to obtain and maintain this coverage could result in a breach of the franchise agreement and potential penalties.