How much notice of cancellation must be given to Chocolate Fish Coffee for insurance policies?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 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 ensure that their insurance policies stipulate that Chocolate Fish Coffee receives 30 days' prior written notice of cancellation. This requirement is part of the broader insurance obligations outlined in the Franchise Agreement and Brand Standards Manual. These obligations also include specific coverage types and minimum amounts.
Specifically, franchisees are required to maintain several types of insurance: "Special" causes of loss coverage, business interruption insurance covering at least 12 months of income, Commercial General Liability insurance with a $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, Business Automobile Liability insurance of not less than $1,000,000, and Workers Compensation coverage as required by state law.
In addition to the notice of cancellation, Chocolate Fish Coffee requires that the insurance policies (excluding Workers Compensation) list Chocolate Fish Coffee and its affiliates as additional insureds and include a waiver of subrogation in their favor. The policies must also be primary and non-contributing with any insurance carried by Chocolate Fish Coffee or its affiliates. These stipulations ensure that Chocolate Fish Coffee is protected and informed regarding the franchisee's insurance coverage.
This requirement is fairly standard in franchising, as franchisors typically want to ensure franchisees maintain adequate insurance coverage to protect the brand and the entire franchise system from potential liabilities. The 30-day notice allows Chocolate Fish Coffee time to ensure continuous coverage and address any potential gaps if a franchisee's policy is canceled.