What standards must all insurance meet for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
be required to pay the costs of an audit if the audit reflects an underpayment of more than 5% during the period reviewed.
Insurance.
All insurance must meet our standards and specifications and must be written by a responsible carrier or carriers reasonably acceptable to us. You must procure, maintain and provide evidence of certain proscribed levels of liability insurance, unemployment and worker's compensation insurance, employment practices liability insurance, all-risk personal property insurance and cyber liability insurance. You also must provide us with certificates of insurance evidencing your insurance coverage before the opening of your FLOYD'S 99 Shop. All insurance policies must name us as an additional insured and give us at least 30 days prior written notice of termination, amendment or cancellation. You must furnish us with copies of all required insurance policies or other evidence of insurance coverage and payment of premiums as we request periodically. We reserve the right to require you to change the type of insurance you are required to maintain and, upon 60 days prior written notice to you, to revise the required coverage limits.
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Your obligation to obtain and maintain the foregoing insurance policies in the amounts we specify will not be limited in any way by reason of any insurance maintained by us, nor will your performance of that obligation relieve you of liability under the indemnity provisions in the Franchise Agreement.
If you fail to procure or maintain the insurance that we require, we may (but are not required to) obtain the required insurance and charge the cost of the insurance to you. The costs to us of obtaining the insurance, together with a fee for our expenses in so acting, will be payable by you immediately upon notice. The foregoing remedies will be in addition to any other remedies we may have at law or in equity.
Currently, you must obtain, maintain and provide evidence of: (i) comprehensive general liability insurance for the Franchised Location and its operations with a limit of not less than $2,000,000.00 combined single limit or with such greater limits or such other terms and conditions as may be described in the Operations Manual or required as part of any lease agreement for the Franchised Location; (ii) unemployment and worker's compensation insurance with a broad form all-states endorsement coverage sufficient to meet the requirements of the law; (iii) employment practices liability insurance of not less than $500,000 to $1,000,000 per claim, including third-party liability, wage and hour defense costs and punitive and exemplary damages claims, where insurable; (iv) all-risk personal property insurance in an amount equal to at least 100% of the replacement costs of the contents and tenant improvements located at the FLOYD'S 99 Shop; and (v) cyber liability insurance with a limit of not less than $1,000,000 per claim.
**ITEM 9.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–29)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, all insurance obtained by franchisees must adhere to specific standards and specifications set by the company and be underwritten by a carrier reasonably acceptable to Floyds 99. Franchisees are required to procure and maintain certain levels of liability insurance, including comprehensive general liability insurance of not less than $2,000,000, unemployment and worker's compensation insurance, employment practices liability insurance between $500,000 and $1,000,000 per claim, all-risk personal property insurance equal to at least 100% of the replacement costs, and cyber liability insurance with a limit of not less than $1,000,000 per claim.
Before opening a Floyds 99 shop, franchisees must provide certificates of insurance as evidence of their coverage. All insurance policies must name Floyds 99 as an additional insured and provide them with at least 30 days' prior written notice of any termination, amendment, or cancellation. Franchisees must also furnish copies of all required insurance policies or other evidence of coverage and premium payments as requested periodically. Floyds 99 retains the right to modify the required insurance types and coverage limits, providing 60 days' prior written notice.
It's important to note that the franchisee's obligation to maintain the specified insurance coverage is not limited by any insurance Floyds 99 may hold, nor does it relieve the franchisee of liability under the franchise agreement's indemnity provisions. Should a franchisee fail to procure or maintain the required insurance, Floyds 99 has the option, but not the obligation, to obtain the necessary insurance and charge the costs, along with a fee for their expenses, to the franchisee. These remedies are in addition to any other legal or equitable remedies available to Floyds 99.
Prospective franchisees should carefully review these insurance requirements and factor the costs of obtaining and maintaining the necessary coverage into their financial projections. They should also discuss these requirements with their insurance advisors to ensure they understand the scope of coverage needed and can secure appropriate policies that meet Floyds 99's standards.