What is the minimum A.M. Best Rating required for insurance carriers approved by Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies must: (1) be issued by carriers we approve with an A.M. Best Rating of not less than A VII; (2) contain such types and minimum amounts of coverage,
exclusions and maximum deductibles as we prescribe from time to time; (3) name us and our affiliates as additional insured; (4) provide for 30 days' prior written notice to us of any material modification, cancellation or expiration of such policy; (5) provide a waiver of subrogation in favor of us and our affiliates; and (6) include such other provisions as we may require. The minimum amount of liability coverage we prescribe in no way limits your liability to those minimum amounts. We may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage (including reasonable excess liability insurance) at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. These insurance policies must be primary to and without right of contribution from any other insurance policy purchased by us, our affiliates and our respective directors, officers, employees, shareholders, members, agents, successors and assigns (collectively, "indemnitees"); must not limit or reduce coverage for you if there is a claim by us or any one or more of the other indemnitees; and must extend to and provide indemnity for all of your indemnification obligations to us and the other indemnitees.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, all insurance policies must be issued by carriers approved by Checkers with a minimum A.M. Best Rating of A VII. This requirement ensures that the insurance providers Checkers franchisees use are financially stable and capable of meeting their obligations.
For a prospective franchisee, this means they cannot choose just any insurance company. They must select a provider that Checkers has approved and that meets the A.M. Best Rating threshold. This restriction is in place to protect both the franchisee and Checkers from potential losses due to under-capitalized or unreliable insurance carriers.
The A.M. Best Rating is a widely recognized benchmark in the insurance industry, assessing the financial strength and creditworthiness of insurance companies. A rating of A VII indicates a strong ability to meet ongoing insurance policy and contract obligations. Checkers also requires that these policies contain specific types and minimum amounts of coverage, exclusions, and maximum deductibles as they prescribe, further ensuring adequate protection for the business.
It is important for prospective franchisees to understand that Checkers may periodically increase the required coverage amounts or require different or additional insurance coverage to reflect changes in inflation, new risks, or legal standards. Franchisees should factor in potential increases in insurance costs when projecting their operating expenses.