Who is responsible for loss or damage arising from the development and operation of each Chicken Guy Franchised Restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the franchisee (referred to as the 'Developer') is responsible for all loss or damage arising from the development and operation of each franchised restaurant. This includes any demands or claims related to loss, liability, personal injury, death, property damage, or expenses occurring on the premises or in connection with the restaurant's development or operation.
To mitigate these risks, Chicken Guy requires the franchisee to maintain insurance coverage throughout the development term. The franchisee determines the necessary or appropriate insurance for liabilities, but it must include specific policies and amounts detailed in the manual or provided in writing. Chicken Guy can also increase minimum coverage requirements to reflect inflation, liability standards, or other changes. The franchisee must promptly secure additional coverage or higher policy limits upon written notice of such modifications.
The required insurance policies include Comprehensive or Commercial General Liability Insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 in the aggregate, All Risks Property Insurance for the full replacement value, Business Interruption and Extra Expense Insurance for at least 12 months, Plate Glass Insurance, Employer's Liability Insurance, Liquor Liability Insurance (if applicable) with minimum limits of $1,000,000, and Workers' Compensation. Additionally, Builder's All Risk Insurance is required for new construction or substantial renovations. Chicken Guy also requires performance and completion bonds.
Furthermore, the franchisee must indemnify, defend, and hold harmless Chicken Guy and its affiliates from all losses and expenses connected with the franchisee's development and activities, excluding gross negligence or willful misconduct by Chicken Guy. The franchisee must promptly notify Chicken Guy of any related legal actions and provide requested documents. Chicken Guy has the option to assume the defense and/or settlement of any claim, but this does not diminish the franchisee's indemnification obligations.