What are the minimum rating requirements for insurance carriers providing coverage to Cinnabon franchisees?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
y way by reason of any insurance that we may maintain, nor will it relieve you of your indemnity obligations stated in Section 13.1 (Indemnification). These policies are required to respond on a primary and non-contributory basis to any insurance carried by us or our affiliates and may not otherwise limit coverage for tort liabilities assumed in this Agreement. We may from time to time increase, decrease, add to, delete from, or modify the mandatory insurance coverages we require in accordance with reasonable and customary changes in the industry, as we determine. You currently must obtain and maintain the coverage specified in Schedule A. We reserve the right to obtain a master insurance policy on behalf of the System for certain types of coverage and require you to pay all or a portion of your proportionate share of coverage under the master policy to us or our Approved Supplier.
- 13.3 Carrier; Proof of Insurance. All insurance policies required under this Agreement: (i) must be issued by an insurance carrier authoriz
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon FDD, all insurance policies that franchisees are required to obtain must meet specific criteria regarding the insurance carrier's financial strength and authorization to conduct business. The insurance policies must be issued by a carrier authorized to conduct business in the state where the Cinnabon franchise is located.
Specifically, the insurance carrier must have a minimum rating of "A-" (Excellent) / VIII ($100M to $250M policy holder surplus) or better by A.M. Best and Company, Inc., or its successor. This rating indicates that the insurance company has a strong financial standing and the ability to meet its obligations to policyholders.
In addition to the rating requirements, the insurance policies must also include Cinnabon and its affiliates as additional insured parties for claims arising from the franchisee's operations. The policies must also include a waiver of subrogation in favor of Cinnabon. Furthermore, the insurer must provide Cinnabon with 30 days' written notice before any cancellation or modification of the policy, except in the case of non-payment of premiums, where only 10 days' notice is required. The policies must be written on occurrence-based policy forms and may not be subject to unreasonable deductibles or retentions without Cinnabon's prior written approval.