Under what conditions does a Cinnaholic franchisee need to carry automobile liability coverage?
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.
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 must maintain automobile liability coverage under specific conditions. A franchisee is required to have non-owned automobile liability insurance. Additionally, if the franchisee owns, rents, or identifies any vehicles with any Cinnaholic mark, or if vehicles are used in connection with the operation of the bakery, they must also carry 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 maintain commercial general liability insurance with a combined single limit of $1,000,000 per occurrence and $2,000,000 in the aggregate. They must also secure excess liability umbrella coverage for both the general and automobile liability coverages, amounting to no less than $2,000,000 per occurrence and aggregate. These insurance requirements are designed to protect both the franchisee and the Cinnaholic brand from potential liabilities.
The cost of insurance will 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 limits than the minimums required by Cinnaholic. It is important for prospective franchisees to factor in these insurance costs when evaluating the overall investment required to open and operate a Cinnaholic franchise.