Does Desi District require business interruption insurance?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
re document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than
$1,000,000, and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior writ
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees are required to obtain business interruption insurance. The insurance must cover at least 12 months of income. This requirement is part of a broader set of insurance obligations that Desi District imposes on its franchisees to protect the business and brand.
In addition to business interruption insurance, Desi District requires franchisees to maintain (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law.
The insurance policies, with the exception of Workers Compensation, must list Desi District and its affiliates as additional insured parties. These policies must also include a waiver of subrogation in favor of Desi District and its affiliates. Furthermore, the franchisee's insurance must be primary and non-contributing with any insurance carried by Desi District or its affiliates. The insurance policies must also stipulate that Desi District receives 30 days' prior written notice of cancellation.
Franchisees should carefully review the specific insurance requirements with a qualified insurance professional to ensure they obtain the necessary coverage and comply with Desi District's mandates, as failure to maintain adequate insurance could result in a breach of the franchise agreement.