What is the minimum AM Best rating required for the Chatime franchisee's insurance carrier?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ments, and Franchisee must comply with the updated coverage standard. Some property owners may require higher levels of commercial general liability insurance or other insurance coverage under their leases.
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; and
- (g) crime insurance with a minimum coverage of $100,000 for each claim.
(h) We also currently r
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
Based on the 2025 Chatime Franchise Disclosure Document, the document does not specify a minimum AM Best rating for the franchisee's insurance carrier. The FDD details the types and minimum coverage amounts required for insurance policies a franchisee must maintain.
Chatime franchisees are required to maintain several insurance coverages, including general liability, commercial auto, workers compensation, property/business interruption, cyber liability, employment practices liability, and crime insurance. The minimum coverage amounts range from $100,000 to $2 million, depending on the type of coverage. Chatime also recommends build-out insurance coverage.
Because the FDD does not state a minimum AM Best rating, prospective franchisees should ask Chatime's franchisor directly about any requirements or recommendations regarding the financial strength and rating of the insurance carriers used to provide the required coverages. This is a crucial factor in ensuring that the insurance policies will adequately protect the franchisee's business.