Is Workers' Compensation insurance required for a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
s, liability, personal injury, death, property damage, or expense whatsoever occurring upon the premises of, or in connection with the development or operation of, the Franchised Restaurant. Franchisee shall maintain in full force and effect throughout the term of this Agreement that insurance which Franchisee determines is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of the Franchised Restaurant which shall include, at a minimum, insurance policies of the kinds, and in the amounts, required by Section 16.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 Franchisee 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. Franchisee 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:
- (1) Comprehensive or Commercial General Liability Insurance, including coverage for bodily injury, personal injury, products liability, contract
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, Workers' Compensation insurance is required. Specifically, franchisees must maintain Workers' Compensation and any other insurance mandated by the statutes or rules of the state or locality where the franchised restaurant is situated. This coverage must also be in effect for all of the franchisee's employees who participate in any of the training programs.
In addition to Workers' Compensation, Chicken Guy franchisees are required to maintain several other types of insurance, including Comprehensive or Commercial General Liability Insurance with limits of $1,000,000 per occurrence and $2,000,000 in the aggregate, All Risks Property Insurance for the full replacement value of the restaurant, Business Interruption and Extra Expense Insurance for a minimum of 12 months, Plate Glass Insurance, Employer's Liability Insurance in the amount of $500,000 per person, $500,000 in the aggregate and $500,000 for occupational disease, and Liquor Liability Insurance with policy limits of not less than $1,000,000 if alcohol is sold at the restaurant.
The franchisee is responsible for securing and maintaining all required licenses, permits, and certificates for operating the franchised restaurant. This includes compliance with all applicable laws, ordinances, and regulations, such as those related to food handling, immigration, discrimination, occupational hazards, health insurance, employment laws, and the payment of federal and state income taxes, social security taxes, and sales taxes.
Chicken Guy also stipulates general insurance requirements, such as policies being primary and noncontributory, and the Workers' Compensation policy including a waiver of subrogation in favor of Chicken Guy. Franchisees must provide Chicken Guy with proof of insurance no later than 30 days after the agreement is executed and upon each policy renewal date. Failure to maintain the required insurance allows Chicken Guy to procure insurance on behalf of the franchisee and charge the cost to the franchisee.