What is the minimum wage & hour coverage required by Chatime within the employment practices liability insurance?
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 are required to maintain employment practices liability insurance with minimum coverage limits of $500,000 per occurrence and $500,000 aggregate. This insurance must include third-party liability coverage. Furthermore, the policy must specifically include wage and hour coverage of at least $25,000. The maximum deductible for this insurance is $25,000.
This requirement ensures that Chatime franchisees have adequate financial protection against potential employment-related claims, including those related to wage and hour disputes. Wage and hour laws are complex and vary by jurisdiction, so this coverage is particularly important. It helps protect the franchisee from potential liabilities arising from issues such as minimum wage violations, overtime disputes, or misclassification of employees.
The employment practices liability insurance requirements are part of a broader set of insurance obligations Chatime imposes on its franchisees. These obligations also include general liability, commercial auto, workers' compensation, property/business interruption, cyber liability, and crime insurance. Maintaining these insurance coverages is crucial for protecting both the franchisee's business and the Chatime brand from various risks.
Prospective franchisees should carefully review these insurance requirements and factor the costs of obtaining and maintaining the necessary coverage into their overall investment. It is also advisable to consult with an insurance professional to ensure they fully understand the scope of coverage and any potential gaps or exclusions.