What is the maximum deductible allowed by Chatime for employment practices liability insurance?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (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 are required to maintain employment practices liability insurance. This insurance must have minimum coverage limits of $500,000 per occurrence and $500,000 in aggregate. The coverage must include third-party liability and wage and hour coverage of at least $25,000.
Importantly, Chatime specifies that the maximum deductible for this employment practices liability insurance cannot exceed $25,000. This means that in the event of a claim, the franchisee would be responsible for paying up to $25,000 before the insurance coverage kicks in.
This requirement ensures that Chatime franchisees have adequate protection against potential employment-related claims, while also limiting the franchisee's out-of-pocket expenses in the event of a claim. Franchisees should factor in the cost of this insurance, with its specific coverage limits and deductible, when evaluating the overall financial investment required to open and operate a Chatime franchise.