Are Cinnaholic franchisees required to obtain automobile liability coverage if they own vehicles identified with any Mark?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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:
- (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.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are required to maintain certain insurance policies during the term of the agreement. Specifically, if a Cinnaholic franchisee owns, rents, or identifies any vehicles with any of Cinnaholic's Marks, or if vehicles are used in connection with the operation of the bakery, they must obtain automobile liability coverage. This coverage must include owned, non-owned, scheduled, and hired vehicles. The combined single limit for this automobile liability coverage is $1,000,000 per occurrence.
In addition to the automobile liability coverage, Cinnaholic franchisees must also secure and maintain commercial general liability insurance with a combined single limit of $1,000,000 per occurrence and $2,000,000 in the aggregate for bodily injury and property damage. They must also obtain 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.
These insurance policies must be secured from carriers approved by Cinnaholic and maintained at the franchisee's own cost during the term of the Franchise Agreement. All coverages, including automobile liability, must be on an occurrence basis and provide for waivers of subrogation. This means that Cinnaholic can pursue the franchisee's insurance company directly in the event of a claim, and the insurance company cannot then sue the franchisee to recover those costs.