Is a Cinnaholic franchisee required to carry Workers' compensation insurance?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
unt of the full insurable value of such property. You agree to carry Commercial General Liability Insurance, including coverages for products-completed 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. You agree to carry Workers' compensation insurance, or a similar policy if the Bakery is located in a non-subscriber state, covering all of its employees as is required by law. You agree to carry adequate limits for comprehensive crime and blanket employee dishonesty insurance. Finally you agree to carry business interruption and extra expense insurance for a minimum of six months to cover net profits and continuing expenses (including Royalty Fees). You may desire to obtain greater coverages. The cost of your insurance will vary depending on the insurance carriers' charges,
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are required to carry Workers' compensation insurance. The FDD specifies that franchisees must obtain Workers' compensation insurance to cover all employees, as mandated by law. However, if the Cinnaholic bakery is located in a state where Workers' compensation is not a requirement, the franchisee must obtain a similar policy.
In addition to Workers' compensation insurance, Cinnaholic franchisees must also carry other types of insurance, including Commercial General Liability Insurance with specific coverage amounts for various liabilities, automobile liability coverage, and excess liability umbrella coverage. They must also carry adequate limits for comprehensive crime and blanket employee dishonesty insurance, as well as business interruption and extra expense insurance for a minimum of six months to cover net profits and continuing expenses, including Royalty Fees.
The cost of insurance for a Cinnaholic franchise can vary based on factors such as the insurance carrier's charges, payment terms, and the franchisee's insurance history. Franchisees may also choose to obtain greater coverage than the minimum requirements. It is important for prospective franchisees to factor in these insurance costs when evaluating the overall investment and operating expenses of a Cinnaholic franchise.