What is specified in Schedule A regarding insurance coverage for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
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14. Section 10.1.E. (Local Marketing Obligation):
Your Local Marketing Obligation shall be equal to 1% of the Net Sales of your Franchised Business per calendar quarter.
15. Section 11.1.C. (Attending Training):
Your Required Trainees may not begin the Management Training Program until 10 weeks before the scheduled opening date of your Franchised Business.
16. Section 11.2 (On-Site Training):
Approximately seven days after you obtain the Certificate of Occupancy for your first three Franchised Businesses (including Franchised Businesses owned by your affiliates), we will provide you, at the Franchised Business and at our cost, one or more of our representatives to facilitate the opening of such Franchised Businesses.
17. Section 13.2 (Required Insurance):
Currently, you must obtain and maintain the following coverage:
- A. Comprehensive General Liability Insurance, including Products & Completed Operations coverage with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate with a maximum $5,000 deductible per occurrence;
- B. If we authorize you to serve alcohol and you do so, Dram Shop Liability Insurance with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate;
- C. Statutory Workers' Compensation insurance, including employer's liability insurance, with limits not less than $500,000;
- D. Automobile Liability insurance with a combined single limit of $1,000,000 for any owned, hired, or non-owned automobile used in connection with the Franchised Business;
- E. "Follow Form" Umbrella/Excess Liability Policy with limits not less than $2,000,000 per occurrence and in the aggregate that is in excess of items 1, 2, 3 (employer's liability insurance only), and 4 above;
- F. Business Property Insurance that extends coverage on a replacement cost basis for business personal property including electronic equipment, tenant improvements and betterments, and business income and extra expense, with covered causes of loss as "Special" or "All Ris
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, Schedule A specifies the required insurance coverage for franchisees. Franchisees must obtain and maintain several types of insurance with specific coverage limits. These include Comprehensive General Liability Insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate, with a maximum $5,000 deductible per occurrence. If the franchisee is authorized to serve alcohol, they must also carry Dram Shop Liability Insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate.
Additionally, franchisees are required to have Statutory Workers' Compensation insurance, including employer's liability insurance, with limits not less than $500,000, and Automobile Liability insurance with a combined single limit of $1,000,000 for any owned, hired, or non-owned automobile used in connection with the franchised business. An umbrella/excess liability policy with limits not less than $2,000,000 per occurrence and in the aggregate is also required, exceeding the limits of the general liability, dram shop liability, employer's liability, and automobile liability coverages.
Further insurance requirements include Business Property Insurance covering business personal property, tenant improvements, and business income, with 'Special' or 'All Risk' covered causes of loss and at least 80% coinsurance. Franchisees in FEMA Flood Zones A or V must also have flood coverage. Moreover, franchisees need Employment Practices Liability insurance and Cyber Liability insurance, each with limits not less than $1,000,000. Finally, franchisees must maintain any other insurance required by applicable state or local authorities. If a franchisee obtains a claims-made policy, they must provide tail coverage for at least one year after the agreement expires or the business closes, with limits equal to or greater than the prior policy.
These insurance policies must be written on an occurrence basis, and the insurance carrier must be authorized to conduct business in the state where the franchised business is located, with a rating of "A-" or better by A.M. Best. Moe's Southwest Grill and its affiliates must be named as additional insureds, and the policies must include a waiver of subrogation in favor of the franchisor. The insurer must provide 30 days' written notice before any cancellation or modification, except for 10 days' notice for non-payment of premiums. Franchisees must provide proof of insurance before construction, annually upon renewal, and within 10 days of any demand from Moe's Southwest Grill. The franchisor retains the right to modify insurance requirements and may obtain a master insurance policy, with franchisees paying their proportionate share.