What is the dependency of the packers legal liability insurance monthly fee for Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Insurance Payment | Two components determine the amount of the required Insurance Payment: (1) packers legal liability insurance and (2) cargo insurance. The monthly fee for packers legal liability insurance currently ranges from $125 to $500 and is tied to the revenue generated by your Franchised Business. Based on an annual audit performed by the insurance company, a determination is made about the amount of exposure and liability relating to your business activities in the prior year in comparison to our other franchisees. The monthly fee for cargo insurance is variable and calculated monthly based on the volume of cargo insured by your Franchised Business, the declared value of such cargo (in accordance with your then-current cargo insurance rates), and the previous year's loss-ratio of your Franchised Business in the cargo insurance program. The amount of the Insurance Payment could increase based on insurance rates and the business activities of your Franchised Business. | Payable to us on a monthly basis at the same time and in the same manner as the Royalty Fee. | The Insurance Payment relates to insurance secured by us on your behalf as part of a system wide program. As of the issuance date of this Franchise Disclosure Document, the Insurance Payment covers costs associated with packers legal liability insurance and cargo insurance. We reserve the right to require you to secure more insurance policies through this program in the future. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the monthly fee for packers legal liability insurance is dependent on the revenue generated by the franchised business. The FDD specifies that the monthly fee currently ranges from $125 to $500. This fee is part of an overall Insurance Payment, which also includes cargo insurance.
The specific amount within that range that a franchisee will pay is determined by an annual audit performed by the insurance company. This audit assesses the exposure and liability related to the franchisee's business activities compared to other Craters & Freighters franchisees. Therefore, a higher-revenue location is likely to have a higher insurance payment.
In addition to revenue, the amount of the Insurance Payment can fluctuate based on insurance rates and the business activities of the franchised business. The Insurance Payment is made to Craters & Freighters monthly, at the same time and in the same manner as the royalty fee. This payment covers insurance secured by Craters & Freighters on behalf of the franchisee as part of a system-wide program, and Craters & Freighters reserves the right to require franchisees to secure more insurance policies through this program in the future.