What is the minimum general liability coverage required for a Chatime franchise?
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 specific minimum insurance coverages. The general liability coverage must have 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.
In practical terms, this means a Chatime franchisee needs to secure a general liability insurance policy that meets or exceeds these minimum coverage amounts. The $1 million per occurrence limit refers to the maximum amount the insurance company will pay for a single incident. The $2 million general and products/completed operations aggregate is the total amount the insurer will pay out during the policy term for all claims related to general business activities and any products sold or services completed. The $1 million personal/advertising injury coverage protects against claims like libel or slander. The $50,000 rented premises damage covers damages to a rented location, and the $5,000 medical expenses coverage is for smaller medical claims.
Chatime also requires franchisees to name the company and its affiliates as an additional insured party on all insurance policies. Franchisees are responsible for the costs of these insurance premiums, which can vary based on the insurance carrier's charges, payment terms, and the franchisee's history. It is important for prospective franchisees to factor these insurance costs into their overall investment and operating expenses.
Meeting these insurance requirements is crucial for protecting both the franchisee and Chatime from potential financial losses due to accidents, injuries, or other liabilities. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement and potential legal or financial repercussions.