What is the minimum coverage required for Business Interruption (Loss of Earnings) Insurance for a Dolce Hotels franchise?
Dolce_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
to an additional insured.
Specific coverages include Commercial General Liability Insurance with minimum coverage of $1,000,000 combined single limit per occurrence covering premises, products, independent contractors, bodily injury, personal injury, contractual and advertising liability, property damage, and insured contract liability; Liquor Liability with minimum coverage of $1,000,000 per occurrence as well as inclusion in excess liability coverage if beer, liquor, or alcoholic beverages are sold or served on site, including but not limited to, by restaurants or lounges, minibars, or vending machines; Comprehensive Automobile Liability Insurance with minimum coverage of $1,000,000 combined single limit per occurrence on all vehicles; Worker's Compensation in compliance with state laws; Employers Liability Insurance with minimum coverage of $100,000; Business Interruption (Loss of Earnings) Insurance with a minimum of $100,000 of coverage, actual loss or twelve (12) months sustained; and Um
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 49–51)
What This Means (2025 FDD)
According to Dolce Hotels' 2025 Franchise Disclosure Document, franchisees are required to maintain Business Interruption (Loss of Earnings) Insurance with a minimum of $100,000 of coverage, covering either the actual loss sustained or a period of twelve months. This insurance is a component of the broader insurance requirements outlined in Section 3.8 of the Dolce Franchise Agreement and the System Standards Manual.
The Business Interruption Insurance is designed to protect the Dolce Hotels franchisee from financial losses in the event that the business is temporarily unable to operate due to unforeseen circumstances such as property damage from a fire, storm, or other covered event. The $100,000 minimum coverage ensures that the franchisee has some financial buffer to cover ongoing expenses and lost profits during the period of interruption, up to the actual loss sustained or for a maximum of 12 months.
Failure to maintain the required insurance coverage, including the Business Interruption Insurance, constitutes a material default under the Dolce Hotels Franchise Agreement. This could lead to the termination of the agreement. Dolce Hotels also retains the right, but not the obligation, to procure the necessary insurance on behalf of the franchisee if the franchisee fails to do so, and to charge the franchisee for the cost of the insurance plus a reasonable fee for expenses incurred.
The insurance requirements, including the minimum coverage for Business Interruption, are part of Dolce Hotels' effort to ensure brand consistency and protect the financial interests of both the franchisor and the franchisees. Prospective franchisees should carefully review all insurance requirements and factor the costs of obtaining and maintaining the necessary coverage into their overall investment and operating budget.