What insurance policies must the Chicken Guy Developer maintain at a minimum?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
y from time to time. Developer will be required to pay all travel, living, food and other incidental expenses incurred by Developer and its employees while attending development training and optional development training.
- I. Delegation. Chicken Guy has the right, from time to time, to delegate the performance of any portion or all of its obligations and duties under this Agreement to designees, whether affiliates or agents of Chicken Guy or independent contractors with which Chicken Guy has contracted to provide this service.
6. INSURANCE
A. Procurement of Insurance by Developer. Developer shall be responsible for all loss or damage arising from or related to Developer's development and operation of each Franchised Restaurant, and for all demands or claims with respect to any loss, liability, personal injury, death, property damage, or expense whatsoever occurring upon the premises of, or in connection with the development or operation
of, each Franchised Restaurant. Developer shall maintain in full force and effect throughout the Development Term that insurance which Developer determines is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of each Franchised Restaurant, which shall include, at a minimum, insurance policies of the kinds, and in the amounts, required by Section 6.B. Chicken Guy, and any entity with an insurable interest designated by Chicken Guy, shall be an additional insured in all liability policies (except workers compensation) to the extent each has an insurable interest.
- B. Minimum Insurance Requirements. All insurance policies shall be written by an insurance company or companies satisfactory to Chicken Guy, in compliance with the standards, specifications, coverages and limits set forth in the Manual or otherwise provided to Developer in writing. Chicken Guy may reasonably increase the minimum required coverage and require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards or other relevant changes in circumstances. Developer shall receive written notice of such modifications and shall take prompt action to secure the additional coverage or higher policy limits. These policies shall include, at a minimum, the following for each Franchised Restaurant:
- (1) Comprehensive or Commercial General Liability Insurance, including coverage for bodily injury, personal injury, products liability, contractual liability, broad form property damage, nonowned automobiles, completed operations on an occurrence basis with policy limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate.
- (2) All Risks Property Insurance, for fire and related peril (including floods and earthquakes where applicable) with limits of insurance of not less than the full replacement value of each Franchised Restaurant and its furniture, fixtures, equipment, inventory and other tangible property.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Developer must maintain several insurance policies for each Franchised Restaurant. These include Comprehensive or Commercial General Liability Insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate, All Risks Property Insurance for the full replacement value of the restaurant, and Business Interruption and Extra Expense Insurance for a minimum of 12 months. Additionally, Plate Glass Insurance, Employer's Liability Insurance ($100,000 per person, $500,000 aggregate, $100,000 for occupational disease), and Liquor Liability Insurance ($1,000,000 policy limits) are required if alcohol is sold.
The Developer must also carry Workers' Compensation, Builder's All Risk Insurance during construction, Cyber Liability Insurance with a $1,000,000 minimum limit, and Umbrella or Excess Liability Insurance in the amount of $3,000,000 per occurrence and $3,000,000 in annual aggregate. These policies must meet specific requirements, such as being written by a satisfactory insurance company and providing primary coverage over any insurance held by Chicken Guy. Chicken Guy can also increase minimum coverage requirements.
These insurance requirements are typical in franchising, as they protect both the franchisee and franchisor from potential liabilities. The Developer is responsible for ensuring that all insurance policies are in effect throughout the Development Term and must provide proof of insurance to Chicken Guy. Failure to maintain the required insurance allows Chicken Guy to procure insurance on the Developer's behalf and charge the costs to the Developer. The Developer acknowledges that these insurance requirements do not constitute advice from Chicken Guy and that the Developer is responsible for determining adequate coverage.