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What is the minimum coverage amount required for Automobile Liability insurance for Chicken Guy franchisees engaged in delivery operations?

Chicken_Guy Franchise · 2025 FDD

Answer from 2025 FDD Document

ise Agreement and on each policy renewal date thereafter.

These required insurance policies include, at a minimum, the following: Comprehensive or Commercial General Liability Insurance, including coverage for bodily injury, personal injury, products liability, contractual liability, broad form property damage, non-owned automobiles, and completed operations and property damage on an occurrence basis with policy limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; 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 the Franchised Restaurant, its furniture, fixtures, equipment, inventory and other tangible property; Business Interruption and Extra Expense Insurance, including rental payment continuation for a minimum of 12 months, loss of profits and other extra expenses experienced during the recovery from property loss; Plate Glass Insurance for replacement of glass from breakage; Employer's Liability Insurance in the amount of $500,000 per person, $500,000 in the aggregate and $500,000 for occupational disease; Liquor Liability Insurance for bodily injury and property damage on an occurrence basis with policy limits of not less than $1,000,000, to the extent that we have approved the sale of alcoholic beverages at the Franchised Restaurant; Workers' Compensation and such other insurance as may be required by statute or rule of the state or locality in which the Franchised Restaurant is located, including coverage for all of your employees who participate in any of the training programs; Builder's All Risks Insurance in connection with new construction or substantial renovation, refurbishment or remodeling of the Franchised Restaurant; Automobile Liability if you are engaged in any delivery operations with coverage on a Symbol 1 (any auto) basis in the amount of $1,000,000 per occurrence on any auto; Cyber-Liability Insurance with a minimum limit of $1,000,000 to include coverage for business interruption loss, cyber extortion, data recovery costs and data and network liability; and Umbrella or Excess Liability Insurance in the amount of $3,000,000 per occurrence and $3,000,000 in the annual aggregate that incl

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–22)

What This Means (2025 FDD)

According to Chicken Guy's 2025 Franchise Disclosure Document, franchisees engaged in delivery operations must maintain Automobile Liability insurance. The minimum coverage required is $1,000,000 per occurrence on any auto, using a Symbol 1 (any auto) basis. This means the insurance policy covers any vehicle used for delivery, whether owned, leased, or hired by the franchisee.

This requirement ensures that Chicken Guy franchisees have adequate financial protection in case of accidents involving their delivery vehicles. The $1,000,000 coverage limit is designed to cover potential liabilities for bodily injury or property damage caused by the franchisee's drivers while performing deliveries. It is important for prospective franchisees to factor in the cost of this insurance when evaluating the overall investment and operating expenses of a Chicken Guy franchise.

Chicken Guy also requires franchisees to maintain other insurance policies, including Comprehensive or Commercial General Liability Insurance, All Risks Property Insurance, Business Interruption and Extra Expense Insurance, and Workers' Compensation. The franchisor may increase the minimum coverage required 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. Franchisees will receive written notice of such modifications and must take prompt action to secure the additional coverage or higher policy limits.

It is typical in the franchise industry for franchisors to mandate specific insurance coverage levels to protect the brand and the entire franchise system from potential liabilities. Franchisees must ensure they obtain insurance policies from companies that are satisfactory to Chicken Guy and comply with their standards and specifications.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.