What are the Cinnabon franchisee's obligations regarding the payment of insurance premiums (Item 9) and how does this relate to the franchisor's insurance obligations (Item 1)?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
your Franchised Business.
16. Section 11.2 (On-Site Training):
If this is one of your first two Franchised Businesses (including Franchised Businesses owned by your affiliates), we will send one or more of our representatives to the Franchised Business, at our expense, for a maximum of 3.5 days concurrent with beginning operations to assist in the opening of the Bakery. If you offer Carvel® Products, you must pay us the then-current Carvel® Product Platform Training Fee and our representatives will provide two days of related On-Site Training.
17. Section 13.2 (Required Insurance)
Currently, you must obtain and maintain the following coverage:
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- Comprehensive General Liability Insurance, including Products & Completed Operations coverage with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate with a maximum $5,000 deductible per occurrence;
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- Dram Shop Liability (if you serve alcohol) with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate;
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- Statutory Workers' Compensation insurance, including employer's liability insurance, with limits not less than $500,000;
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- Automobile Liability insurance with a combined single limit of $1,000,000 for any owned, hired, or non-owned automobile used in connection with the Franchised Business;
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- "Follow Form" Umbrella/Excess Liability Policy with limits not less than $2,000,000 per occurrence and in the aggregate that is i
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees are required to maintain various insurance policies with specific coverage amounts. These include Automobile Liability insurance with a $1,000,000 combined single limit, a "Follow Form" Umbrella/Excess Liability Policy with limits not less than $2,000,000 per occurrence and in the aggregate, and Business Property Insurance covering replacement costs.
Additional insurance requirements include Employment Practices Liability insurance and Cyber Liability insurance, each with limits not less than $1,000,000. Franchisees must also obtain any other insurance required by applicable state or local authorities. If a franchisee obtains a claims made policy, they must provide a tail coverage policy for no less than one year after the expiration or termination of the Franchise Agreement.
The FDD excerpt does not specify any insurance obligations of the franchisor, Cinnabon, in Item 1 or elsewhere. Therefore, it is unclear from this document what insurance, if any, Cinnabon carries and how it relates to the franchisee's insurance requirements. A prospective franchisee should ask Cinnabon directly about their insurance obligations and coverage.