Does Chatime allow owner-operators to be excluded from workers' compensation insurance coverage?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
us if so
designated.
- (10) Insurance. We currently require that you maintain the following insurance coverages: A) general liability coverage with minimums of $1 million per occurrence, $2 million general and products/completed operations aggregate, $1 million personal/advertising injury, $50,000 rented premises damage, and $5,000 medical expenses; B) franchisee commercial auto insurance with a $1 million combined single limit; C) workers compensation insurance with coverage limits of $1 million for bodily injury by disease per accident, $1 million policy limit, and $1 million per employee, regardless of state laws and cannot exclude owner-operators; D) property/business interruption coverage business personal property, tenant improvements, equipment, business interruption, and franchisor royalties, for a minimum of 12 months' actual loss sustained; E) cyber liability insurance with minimum coverage limits of $250,000 per occurrence and $250,000 aggregate; F) employment practices liability insurance with minimum coverage limits of $500,000 per occurrence and $500,000 aggregate, which includes third party liability and wage & hour coverage of at least $25,000, with a maximum deductible that does not exceed $25,000; G) crime insurance with a minimum coverage of $100,000 for each claim. We recommend that you maintain build-out insurance coverage. You must also maintain workers' compensation insurance cove
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain workers' compensation insurance and cannot exclude owner-operators from coverage. The FDD specifies that franchisees must obtain workers' compensation insurance with coverage limits of $1 million for bodily injury by disease per accident, a $1 million policy limit, and $1 million per employee.
This requirement ensures that all individuals working in the Chatime business, including the owner-operators, are protected in case of work-related injuries or illnesses. This is regardless of state laws.
The cost of insurance, including workers' compensation, is estimated to be between $3,000 and $6,000, payable to a third-party insurance provider. This cost is part of the initial investment a franchisee must make to start the Chatime business. Franchisees need to factor in this ongoing expense when planning their operational budget.
By mandating that owner-operators be included in workers' compensation coverage, Chatime aims to protect its franchisees from potential financial liabilities related to workplace incidents. This requirement aligns with standard franchise practices that prioritize the safety and well-being of everyone involved in the business.