What is the minimum coverage amount required for liquor liability insurance for a Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
nts and employees; and it must be provided on an Additional Insured Grantor of Franchise Endorsement form CG2029 (or an endorsement form with comparable wording acceptable to us).
- 12.2.2 Insurance must be underwritten by insurers licensed and permitted to write coverage in the state in which the Franchised Business is located. These policies must include the coverage that we require, which currently includes: (a) "all risk" or "special" property insurance covering all real and personal property and equipment on a replacement costs basis, including business interruption and extra expense insurance on an actual loss sustained basis; (b) comprehensive general liability insurance, including products and completed operations in an amount of not less than the following combined single limits: Two Million Dollars ($2,000,000) per occurrence, Two Million Dollars ($2,000,000) personal and advertising injury, Two Million Dollars ($2,000,000) completed operations/products aggregate, Two Million Dollars ($2,000,000) aggregate per location; (c) employment practices liability coverage with a limit of One Hundred Thousand Dollars ($100,000) per occurrence and in the aggregate; (d) commercial automobile liability coverage, including coverage of owned, non-owned, rented or hired vehicles with coverage in amounts not less than One Million Dollars ($1,000,000) combined single limit; and (e) workers' compensation insurance for statutory limits and employer's liability insurance in amounts not less than One Million Dollars ($1,000,000) per accident, One Million Dollars ($1,000,000) each employee per disease and On
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees are required to maintain liquor liability insurance with a minimum coverage of $1,000,000 per occurrence. This insurance protects both the franchisee and Crave Franchising, LLC from potential liabilities arising from the sale or service of alcohol at the franchised business.
Maintaining adequate insurance coverage is a standard requirement in the franchise industry, especially for businesses that serve alcohol. This requirement ensures that franchisees can cover potential damages or legal costs associated with incidents like over-service or serving alcohol to minors. Franchisees must secure this insurance from providers licensed in the state where their Crave location operates.
Crave also mandates that the insurance policy names Crave Franchising, LLC, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, and employees as additional insureds. This protects Crave from vicarious liability related to the franchisee's operations. Franchisees must provide certificates of insurance to Crave before construction begins and annually, at least 30 days before the expiration of any policy. Crave retains the right to modify the minimum coverage requirements annually to reflect changes in inflation or market conditions, potentially increasing the financial burden on franchisees.
It is important to note that the franchisee's obligation to maintain the specified insurance coverage is not limited by any insurance Crave may maintain, nor does it relieve the franchisee of liability under the indemnity provisions outlined in Article 15 of the Franchise Agreement. Franchisees should factor in the cost of this insurance, along with other insurance requirements, when assessing the overall financial investment required to operate a Crave franchise.