Who approves the insurance carriers for the insurance policies that Cinnaholic franchisees are required to maintain?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
aim. This indemnity will continue in effect after the expiration or termination of this Agreement. Under no circumstances will Franchisor or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate its or their losses and expenses, in order to maintain and recover fully a claim against Franchisee.
- 18.2. Insurance. Franchisee agrees to secure and maintain during the term of this Agreement, at its own cost, the following insurance policies by carriers approved by Franchisor:
- (i) Such insurance as may be required by the terms of any lease for the Franchised Site or, if there is no such lease, Franchisee agrees to carry fire and extended coverage insurance covering the building and all equipment, supplies, products, inventory, furniture, fixtures and other tangible property located in the Bakery or on the Franchised Site in the amount of the full insurable value of such property.
- (ii) Commercial General Liability Insurance, including coverages for productscompleted operations, contractual liability, personal and advertising injury, fire damage, medical expenses, and dram shop/liquor liability, having a combined single limit for bodily injury and property damage of $1,000,000 per occurrence and $2,000,000 in the aggregate (except for fire damage and medical expense coverages, which may have different limits of not less than $300,000 for one fire and $5,000 for one person, respectively); plus (ii) non-owned automobile liability insurance and, if Franchisee owns, rents or identifies any vehicles with any Mark or vehicles are used in connection with the operation of the Bakery, automobile liability coverage for owned, non-owned, scheduled and hired vehicles having a combined single limit of $1,000,000 per occurrence; plus (iii) excess liability umbrella coverage for the general liability and automobile liability coverages in an amount of not less than $2,000,000 per occurrence and aggregate. All such coverages shall be on an occurrence basis and shall provide for waivers of subrogation.
- (iii) Workers' compensation insurance, or a s
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees must secure and maintain several insurance policies during the term of their agreement. These policies must be provided by insurance carriers approved by Cinnaholic.
The required insurance policies include fire and extended coverage, commercial general liability insurance with a combined single limit of $1,000,000 per occurrence and $2,000,000 in the aggregate (with some exceptions for fire damage and medical expenses), non-owned automobile liability insurance, and excess liability umbrella coverage of not less than $2,000,000 per occurrence and aggregate. Franchisees also need workers' compensation insurance, comprehensive crime and blanket employee dishonesty insurance, and business interruption and extra expense insurance for a minimum of six months.
Cinnaholic also requires that it be named as an additional insured on each policy. Franchisees must provide certificates of insurance to Cinnaholic before opening their bakery and at least 30 days before any policy expires. These certificates must include endorsements requiring the insurance company to notify Cinnaholic at least 30 days before any material alteration, termination, non-renewal, or cancellation of coverage, as well as notice of any claim filed under the policy within 30 days after filing. Cinnaholic retains the right to increase or change the minimum limits and types of insurance coverage required at its sole discretion during the term of the agreement.
If a franchisee fails to maintain the required insurance coverage, Cinnaholic has the option to obtain the insurance on the franchisee's behalf, and the franchisee must then pay Cinnaholic the premiums incurred. The franchisee's insurance obligations are not limited by any insurance Cinnaholic may maintain, and the franchisee remains responsible for all losses, damages, and contractual liability related to the operation of the franchised business.