Does Chocolate Fish Coffee require 'Special' causes of loss coverage forms?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
cific Obligations
The following are our current specific obligations for purchases and leases:
- A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign our form of Rider to Lease Agreement (attached to this disclosure document 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.
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 are required to obtain specific insurance coverage, including "Special" causes of loss coverage forms. This coverage must include 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.
In addition to the "Special" causes of loss coverage, Chocolate Fish Coffee franchisees must also maintain business interruption insurance covering at least 12 months of income. They are also required to have Commercial General Liability insurance with a $1,000,000 single limit per occurrence and a $2,000,000 aggregate limit, as well as Business Automobile Liability insurance of not less than $1,000,000. Workers Compensation coverage is also mandated, as required by state law.
The insurance policies, with the exception of Workers Compensation, must 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. Furthermore, the insurance provider must give Chocolate Fish Coffee 30 days' prior written notice of cancellation.
These insurance requirements are typical in franchising, as they protect both the franchisee and the franchisor from potential financial losses due to unforeseen events. Franchisees should factor in the cost of these insurance policies when evaluating the overall investment required to open and operate a Chocolate Fish Coffee franchise.