What insurance policies require Fat Shack to be named as an additional insured?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- Note 17: Insurance.
You will need to maintain the insurance coverages set forth in Item 8 below.
We must be named as an additional insured on all liability policies.
Premiums are typically paid on a monthly basis.
The range set forth in the table estimates the first three months of payments.
Source: Item 7 — Estimated Initial Investment (FDD pages 18–22)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack must be named as an additional insured on all liability insurance policies that the franchisee obtains. This requirement is mentioned in Note 17 of Item 7, which discusses business insurance as part of the estimated initial investment. The estimated cost for the first three months of business insurance premiums ranges from $2,000 to $6,000.
Being named as an additional insured protects Fat Shack from potential liabilities arising from the franchisee's operations. This is a common practice in franchising, as it ensures that the franchisor has some level of protection against lawsuits or claims related to the franchisee's business. The franchisee is responsible for covering the costs of the insurance premiums.
Prospective Fat Shack franchisees should carefully review Item 8 of the FDD, as referenced in Note 17, to understand the specific types and amounts of insurance coverage required. It is important to factor in these insurance costs when planning the initial investment and ongoing operational expenses of the franchise. Franchisees should also consult with an insurance professional to ensure they obtain the appropriate coverage to meet Fat Shack's requirements and protect their business.