What notice of cancellation period must Chocolate Bash receive from the franchisee's insurance company?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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, Chocolate Bash franchisees must ensure that their insurance policies stipulate that Chocolate Bash receives 30 days' prior written notice of cancellation. This requirement is part of the broader insurance obligations that franchisees must meet to operate a Chocolate Bash franchise.
Specifically, Chocolate Bash requires franchisees to maintain several types of insurance, including "Special" causes of loss coverage, business interruption insurance, commercial general liability insurance, and workers' compensation coverage. The commercial general liability insurance must have a limit of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit.
In addition to the cancellation notice, Chocolate Bash and its affiliates must be listed as additional insureds on the franchisee's policies (excluding Workers Compensation). The policies must also include a waiver of subrogation in favor of Chocolate Bash and its affiliates and must be primary and noncontributing with any insurance carried by Chocolate Bash or its affiliates. These stipulations ensure that Chocolate Bash is protected and informed about any changes to the franchisee's insurance coverage, allowing them to take necessary actions to protect their interests.