When must a Nothing Bundt Cakes franchisee submit proof of insurance?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
You must furnish us with certificates of insurance (or, at our request, copies of all insurance policies), evidencing the existence and continuation of the insurance coverage required by the Franchise Agreement. All policies must contain a waiver of subrogation in our favor, and must name us, and any additional parties we designate, as additional insureds, at your cost except with regards to workers' compensation insurance. Under each insurance policy, we must receive at least 30 days' prior written notice of any intent to reduce
policy limits, restrict coverage, cancel or otherwise alter or amend said policy. Once obtained, you may not reduce the policy limits, restrict coverage, cancel or otherwise alter or amend the insurance policies without our written consent. You must submit proof of insurance before you begin making leasehold improvements and deliver a complete copy of your then-prevailing policy of insurance within 30 days following the delivery of the certificate of insurance.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 36–40)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, franchisees must provide proof of insurance coverage at two specific times. First, a franchisee must submit proof of insurance before beginning any leasehold improvements to the bakery location. Second, the franchisee must deliver a complete copy of their then-prevailing insurance policy within 30 days after delivering the initial certificate of insurance.
This requirement ensures that Nothing Bundt Cakes franchisees have adequate insurance coverage in place to protect both their business and the franchisor from potential liabilities. The initial proof of insurance is required before leasehold improvements begin, likely to cover any damages or liabilities that may arise during the construction or renovation phase. The subsequent submission of the complete insurance policy within 30 days of the certificate provides Nothing Bundt Cakes with a comprehensive understanding of the franchisee's coverage details.
It is important to note that Nothing Bundt Cakes also stipulates minimum ratings for insurance providers (Best's Insurance Guide minimum rating of A-VI or better) and requires that Nothing Bundt Cakes and any designated affiliates be named as additional insured parties on all policies (except worker's compensation). Franchisees must also ensure that Nothing Bundt Cakes receives at least 30 days' prior written notice of any intent to reduce policy limits, restrict coverage, or cancel the insurance policy. These stipulations are in place to protect the Nothing Bundt Cakes brand and ensure consistent risk management across all franchise locations.
Prospective franchisees should carefully review the insurance requirements outlined in Item 8 of the Franchise Disclosure Document and consult with an insurance advisor to ensure they can meet these requirements. Failing to maintain adequate insurance coverage could result in a breach of the Franchise Agreement and potential termination of the franchise.