What coverage basis is required for the Commercial Property insurance for a Hardees Franchised Restaurant?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Commercial Property insurance that extends coverage on a replacement cost basis for the Franchised Restaurant, business personal property (including electronic equipment, tenant improvements & betterments), and business income and extra expense for a minimum of 12 months or actual loss sustained to cover loss of profits, continuing expenses and loss of rents. Covered causes of loss should be "Special Form" or "All Risk" with coinsurance conditions not less than 80%. Flood insurance is also required for locations that reside in FEMA Flood Zones beginning with the letters "A" or "V." Earthquake insurance is also required for locations that reside in FEMA Seismic Design Categories "E" or "D."
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, franchisees must maintain Commercial Property insurance that extends coverage on a replacement cost basis. This insurance should cover the franchised restaurant, business personal property (including electronic equipment, tenant improvements, and betterments), and business income and extra expenses.
The coverage must be for a minimum of 12 months or the actual loss sustained to cover loss of profits, continuing expenses, and loss of rents. The covered causes of loss should be "Special Form" or "All Risk" with coinsurance conditions not less than 80%.
Additionally, if the Hardees location resides in FEMA Flood Zones beginning with the letters "A" or "V," flood insurance is required. Earthquake insurance is also mandated for locations in FEMA Seismic Design Categories "E" or "D."