What are the minimum policy limits for Comprehensive or Commercial General Liability Insurance that Chicken Guy franchisees must maintain?
Chicken_Guy Franchise · 2025 FDDAnswer 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 includes the prior mentioned coverages as underlying policies. You also must maintain performance and completion bonds in forms and amounts,
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 are required to maintain Comprehensive or Commercial General Liability Insurance with specific minimum coverage limits. This insurance must include 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. The minimum policy limits are $1,000,000 per occurrence and $2,000,000 in the aggregate.
This requirement ensures that Chicken Guy franchisees have adequate financial protection against potential liabilities arising from the operation of their restaurants. The per occurrence limit covers individual incidents, while the aggregate limit caps the total coverage for all claims within a policy period. Franchisees must secure and maintain this level of coverage to comply with Chicken Guy's franchise agreement and to mitigate risks associated with running a food service business.
In addition to Comprehensive or Commercial General Liability Insurance, Chicken Guy franchisees must also maintain other types of insurance, such as All Risks Property Insurance, Business Interruption and Extra Expense Insurance, and Workers' Compensation. The franchisor, Chicken Guy, also retains the right to 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 important for prospective Chicken Guy franchisees to factor in the cost of these insurance policies when evaluating the overall investment required to start and operate a franchise. They should consult with insurance professionals to obtain quotes and ensure they understand the terms and conditions of each policy. Maintaining the required insurance coverage is a critical aspect of fulfilling the franchise obligations and protecting the franchisee's business and personal assets.