What kind of coverage is required for property of the business for a Chocolate Fish Coffee franchise?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
nt as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards 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) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) 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 non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notic
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 16–18)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees must obtain "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the business. This coverage must be for the full repair and replacement value of the property, though it is subject to a reasonable deductible.
In practical terms, this means a Chocolate Fish Coffee franchisee needs to secure property insurance that covers a wide range of potential damages or losses. The "Special" causes of loss coverage is a broad form of insurance, protecting against risks like fire, theft, vandalism, and other potential disasters. The requirement to insure for full repair and replacement value ensures that in the event of a covered loss, the franchisee can fully restore the business to its pre-loss condition, minus any deductible.
This insurance requirement is fairly standard in franchising, as franchisors want to protect their brand's reputation and ensure franchisees can quickly recover from unforeseen events. The franchisee should carefully review the specific terms of the insurance policy to understand what is covered, what is excluded, and the amount of the deductible. Additionally, the franchisee should confirm that the policy meets Chocolate Fish Coffee's requirements, including listing the franchisor and its affiliates as additional insured and providing a waiver of subrogation.