For how many months of actual loss sustained does Chatime require property/business interruption coverage?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ier directly or to 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 mini
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees must maintain property/business interruption coverage for a minimum of 12 months of actual loss sustained. This insurance coverage should include business personal property, tenant improvements, equipment, and franchisor royalties.
This requirement means that a Chatime franchisee's insurance policy must cover losses experienced over a 12-month period due to business interruption. This could be due to events like property damage from a fire, natural disaster, or other unforeseen circumstances that force the store to close temporarily. The coverage is designed to help the franchisee recover lost income and continue meeting financial obligations, including royalty payments to Chatime, during the downtime.
Franchisees should carefully review their insurance policies to ensure they meet this minimum requirement of 12 months' coverage for actual loss sustained. It is also important to understand what specific events or circumstances are covered under the policy and what documentation is needed to make a claim. Consulting with an insurance professional experienced in franchise business coverage is advisable to ensure adequate protection.