Who is responsible for the expense of the required insurance coverage for a Cinnaholic franchise?

According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are responsible for obtaining and maintaining the required insurance coverage at their own expense. This obligation is outlined in Item 8, which details restrictions on sources of products and services. The franchisee must meet all insurance-related obligations as stipulated in the Franchise Agreement.

Specifically, franchisees are required to carry various types of insurance, including Commercial General Liability Insurance with specified coverage limits, automobile liability coverage, and excess liability umbrella coverage. Additionally, they must carry Workers' Compensation insurance, comprehensive crime and blanket employee dishonesty insurance, and business interruption and extra expense insurance. The FDD also states that if there is no lease for the Franchised Site, the franchisee must 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.

The cost of insurance will vary depending on factors such as the insurance carriers' charges, terms of payment, and the franchisee's insurance history. While Cinnaholic specifies the types and minimum amounts of coverage required, it is the franchisee's responsibility to secure and pay for this insurance. Franchisees may also choose to obtain greater coverage than the minimum requirements, but this would also be at their own expense. This is a standard practice in franchising, where the franchisee typically bears the costs of operating their individual business, including insurance.