Are Lees Famous Recipe franchisees required to carry employment practices liability insurance?

According to Lees Famous Recipe's 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain employment practices liability insurance. This insurance coverage is in addition to other mandatory insurance policies, such as worker's compensation, business interruption insurance, commercial general liability insurance, commercial motor vehicle liability insurance, unemployment compensation, disability insurance, social security, health insurance, property insurance, and builders' risk insurance.

The employment practices liability insurance protects the franchisee against claims from employees related to issues like wrongful termination, discrimination, or harassment. The FDD specifies that franchisees are responsible for covering the costs associated with all required insurance policies.

Lees Famous Recipe retains the right to procure insurance coverage on behalf of a franchisee if the franchisee fails to maintain the required coverage. The insurance requirements outlined in the Franchise Agreement are designed to protect Lees Famous Recipe. However, the document advises franchisees to seek guidance from their own insurance agents, attorneys, and other insurance advisors to determine the appropriate level of insurance protection beyond the minimum requirements set by the franchisor.