What is the required duration of business interruption insurance coverage for a Devon Creek franchise?

According to the 2024 Devon Creek Franchise Disclosure Document, franchisees must maintain business interruption insurance that provides coverage for at least twelve months of lost income. This coverage must include provisions for the Franchisor's Royalty Fees, Brand Development Fund Contribution, and co-insurance requirements.

This requirement ensures that if a Devon Creek franchise experiences an interruption in business operations due to unforeseen circumstances such as natural disasters, property damage, or other covered events, the franchisee will have financial support to cover ongoing expenses. The insurance helps to mitigate the financial impact of the business interruption by replacing lost income and covering specific obligations to the franchisor.

For a prospective Devon Creek franchisee, this means factoring in the cost of business interruption insurance when assessing the overall investment and operating expenses. It is important to understand the specific terms and conditions of the insurance policy, including what events are covered, the amount of coverage provided, and any exclusions that may apply. Franchisees should also ensure that the policy meets the minimum requirements set by Devon Creek to avoid any compliance issues.

Devon Creek also requires the franchisee to provide current Certificates of Insurance evidencing the existence and continuation of the required coverages. If requested by Devon Creek, the franchisee must deliver a copy of the insurance policy or policies. Failure to procure or maintain the required insurance allows Devon Creek to procure the insurance and charge the franchisee for the cost plus a 10% administrative fee, including all attorneys' fees.