When must a Monicals Pizza franchisee procure the required insurance policies?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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Within ninety (90) days of the Effective Date, but in no event later than the commencement of operations, Franchisee shall procure and thereafter maintain in full force and effect during the term of this Agreement, the insurance listed below. The liability policy including any applicable umbrella/excess policies shall expressly name Franchisor as an additional insured. In addition to any other insurance that may be required by applicable law, or by any lender or lessor, Franchisee shall procure:
- 15.1.1 "Special Form" (all risk) property insurance coverage on all assets including inventory, furniture, fixtures, equipment, supplies, and leasehold improvements and betterments and other property used in the operation of the Franchised Restaurant at full replacement cost;
- 15.1.2 Workers' compensation insurance that complies with the statutory requirements of the state in which the Franchised Restaurant is located and employer liability coverage with a minimum limit of ONE MILLION DOLLARS ($1,000,000.00) or, if higher, the statutory minimum limit as required by applicable state law;
- 15.1.3 Commercial general liability insurance against claims for bodily and personal injury, death and property damage caused by, or occurring in conjunction with, the operation of the Franchised Restaurant, including premises and operations, contractual liability, products completed operations and personal and advertising injury, with minimum limits of liability for each type of insurance of ONE MILLION DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00) general aggregate or higher if required by any landlord or lease agreement or by state law
- 15.1.4 Liquor liability/dram shop policy with a minimum liability coverage of ONE MILLION DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00) in the aggregate or, if higher, the statutory minimum limit required by applicable st
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, a franchisee must procure and maintain the required insurance policies within ninety (90) days of the Effective Date of the franchise agreement. However, these policies must be in effect no later than the commencement of operations of the Monicals Pizza restaurant.
This means that a prospective Monicals Pizza franchisee needs to secure all necessary insurance coverage, including property, workers' compensation, commercial general liability, and liquor liability (if applicable), well in advance of opening their restaurant. Failure to obtain and maintain the required insurance coverage could result in Monicals Pizza procuring the insurance on behalf of the franchisee and charging the franchisee for the premiums and associated expenses.
The insurance policies must expressly name Monicals Pizza as an additional insured on the liability policy, including any umbrella/excess policies. Additionally, the insurance company providing the coverage must be approved by the state insurance department in the state where the franchisee operates and have at least an "AVII" Rating Classification as indicated in the latest issue of A.M. Best's Key Rating Guide. The franchisee must also provide certificates of insurance to Monicals Pizza annually, at least ten (10) days prior to the expiration of each policy, showing compliance with the insurance requirements.