For Red Wagon Club's Business Interruption insurance, what is the minimum period of indemnity that must be included?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| Coverage Types | Required Limits of Coverage | |
|---|---|---|
| Business Interruption | For not less than 50% of your gross sales or 12 months Actual Loss Sustained basis and include extended period of indemnity for 180 days; including Franchisor’s Program Fees |
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, franchisees are required to maintain Business Interruption insurance. This insurance must cover at least 50% of the franchisee's gross sales or be based on 12 months of Actual Loss Sustained.
In addition to the minimum coverage amount, the Business Interruption insurance policy must include an extended period of indemnity for 180 days. This extended period helps cover losses that continue after the physical damage to the business location has been repaired and operations have resumed.
It is important for prospective Red Wagon Club franchisees to understand these insurance requirements and factor the costs into their financial planning. Franchisees should consult with an insurance professional to ensure they obtain adequate coverage that meets both the franchisor's minimum requirements and their own business needs.