What is the minimum coverage required for property/business interruption coverage for a Chatime franchise, and what does it cover?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
or modify this list as we deem appropriate.
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
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–25)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain property/business interruption coverage. This coverage must extend to business personal property, tenant improvements, equipment, business interruption, and franchisor royalties. The minimum coverage period for actual loss sustained is 12 months.
This insurance requirement ensures that Chatime franchisees are protected against financial losses resulting from property damage or business interruptions. The coverage includes not only the physical assets of the business, such as equipment and tenant improvements, but also potential losses in income and royalties owed to the franchisor. By requiring a minimum coverage period of 12 months for actual loss sustained, Chatime aims to provide franchisees with a financial safety net to help them recover from unforeseen events without prolonged disruption.
Franchisees should carefully review their insurance policies to ensure they meet Chatime's requirements and adequately protect their investment. It is also important to understand the terms and conditions of the policy, including any exclusions or limitations. Since insurance premiums will depend on the insurance carrier's charges, terms of payment and your history, franchisees should shop around for the best rates and coverage options. Additionally, all insurance policies must name Chatime and its affiliates as an additional insured party.