What is the minimum business interruption insurance coverage period required by Chocolate Bash?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and noncontributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees must secure business interruption insurance that covers at least 12 months of income. This requirement ensures that Chocolate Bash franchisees have financial protection to cover ongoing expenses and lost revenue if their business operations are temporarily suspended due to unforeseen circumstances such as fire, natural disasters, or other covered events.
Business interruption insurance is a common requirement in franchise agreements, as it helps to mitigate the financial risks associated with unexpected disruptions. The specific coverage period, in this case, 12 months, is designed to provide a sufficient buffer for franchisees to rebuild, relocate, or otherwise restore their business to its pre-disruption state.
In addition to business interruption insurance, Chocolate Bash also mandates other insurance coverages, including "Special" causes of loss coverage, Commercial General Liability insurance ($1,000,000 single limit per occurrence and $2,000,000 aggregate limit), and Workers Compensation coverage as required by state law. These policies must list Chocolate Bash and its affiliates as additional insured, include a waiver of subrogation, be primary and noncontributing with any insurance carried by Chocolate Bash, and stipulate that Chocolate Bash receive 30 days' prior written notice of cancellation. These comprehensive insurance requirements are intended to protect both the franchisee and Chocolate Bash from potential liabilities and financial losses.