What rating from A.M. Best is required for the insurance obtained by a Lees Famous Recipe franchisee?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Insurance. You must obtain the types of insurance that your Franchise Agreement requires from an insurer with an A.M. Best rating of at least "A" before you open your Restaurant. In addition, if you lease your location, you must also obtain the insurance that your lease requires. You should contact your insurance advisor prior to entering an Area Development Agreement or Franchise Agreement because the costs of insurance vary widely and may not be refundable. See Item 11 for more information.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–26)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, franchisees must secure insurance from a provider with a minimum A.M. Best rating of "A" before commencing restaurant operations. This requirement is stipulated in Item 7, which outlines the estimated initial investment for establishing a Lees Famous Recipe franchise.
This insurance requirement is a standard practice in franchising to protect both the franchisee and the franchisor from potential liabilities and risks. The "A" rating from A.M. Best indicates that the insurance company has a strong financial ability to meet its ongoing obligations to policyholders.
Prospective franchisees should contact their insurance advisor early in the process, as insurance costs can vary significantly and may not be refundable. Item 11 of the FDD provides further details on insurance requirements. Securing appropriate insurance coverage is a crucial step in the initial setup, and franchisees must ensure compliance with this requirement to avoid any operational delays.