What is the required coverage amount for Employer Practices Liability Insurance for Mr. Sandless franchisees, and who should be named as co-defendant?

According to Mr. Sandless's 2025 Franchise Disclosure Document, franchisees are required to maintain Employer Practices Liability Insurance with a coverage amount of $1,000,000. The franchisor, Mr. Sandless, must be named as a co-defendant on this policy. This insurance covers employment wrongful acts, including third-party liability for harassment and discrimination of non-employees.

This requirement means that franchisees must secure an insurance policy that specifically protects against potential liabilities arising from employment-related issues. The inclusion of Mr. Sandless as a co-defendant suggests that the franchisor wants to be involved in the defense of such claims, potentially to protect its brand and reputation.

For a prospective franchisee, this translates into an added operational cost. It is important to factor in the premium for this insurance policy when evaluating the overall financial investment required to start and run a Mr. Sandless franchise. Additionally, franchisees should ensure that the insurance policy meets all the specific requirements outlined by Mr. Sandless, including the coverage amount and the naming of the franchisor as a co-defendant, to avoid any potential breaches of the franchise agreement.

It is also important to note that Mr. Sandless requires that each policy be written by an insurance company acceptable to them, and that they, their affiliates, and their officers, directors, agents, attorneys, and employees are named as additional insured parties. Furthermore, all required insurance policies must contain a waiver of subrogation in favor of the additional insureds, and renewal certificates must be delivered each year. The policies must also provide thirty days' prior written notice to Mr. Sandless before any cancellation, termination, modification, or reduction in coverage.