Is a Jersey Mikes franchisee required to have business interruption insurance, and if so, who does this insurance provide payment to for lost royalties and advertising fund payments?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
which may periodically change.
You must procure at your expense and maintain the following minimum insurance policies (except as additional coverage and higher policy limits may reasonably be specified for all franchisees from time to time by Company in the Manual or otherwise in writing) issued by an insurance company with an A.M. Best rating of "A-" or better:
- a. Commercial general liability insurance, including products liability, property damage, owned and non-owned automobile coverage and personal injury coverage with the f ollowing minimum limits: (i) Each Occurrence: $1,000,000; (ii) Damage to Rented Premises: $100,000 (each occurrence); (iii) Medica 1 Expense (any one person): $5,000; (iv) Personal and Advertising Injury: $1,000,000; (v) General Aggregate: $2,000,000: and Products Completed Operations Aggregate: $2,000,000.
- b. Property insurance covering fire, vandalism, theft, burglary and extended coverage insurance on a replacement value basis.
- c. Business interruption insurance providing payment to Company of lost royalties and advertising fund payments.
- d. Employment Practices Liability Insurance with a combined single limit of at least $500,000, including full prior acts coverage, third party coverage, and Fair Labor Standards Act (FLSA) coverage (FLSA coverage to have a sub-limit of $100,000).
e. Workers' compensation and employer's liability insurance as well as such other insurance as may be required by statute or rule of the state in which your Jersey Mike's Restaurant is located.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–32)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, franchisees are required to maintain business interruption insurance. This insurance policy is specifically structured to provide payments to Jersey Mike's in the event of lost royalties and advertising fund payments that may occur due to business interruption.
In addition to business interruption insurance, Jersey Mike's requires franchisees to procure and maintain several other minimum insurance policies. These include commercial general liability insurance with specific minimum limits for various liabilities, and property insurance covering fire, vandalism, theft, burglary, and extended coverage on a replacement value basis. Franchisees must also carry Employment Practices Liability Insurance with a combined single limit of at least $500,000, including full prior acts coverage, third party coverage, and Fair Labor Standards Act (FLSA) coverage, with a $100,000 sub-limit for FLSA coverage.
Furthermore, franchisees are required to have workers' compensation and employer's liability insurance, as well as any other insurance mandated by the state in which the Jersey Mike's restaurant is located. All these insurance policies must be issued by an insurance company with an A.M. Best rating of "A-" or better, ensuring the financial stability and reliability of the insurer. Jersey Mike's also retains the right to specify additional coverage and higher policy limits for all franchisees from time to time in the Manual or otherwise in writing.