What is the minimum required Business Interruption coverage for a Red Wagon Club franchise?

According to Red Wagon Club's 2024 Franchise Disclosure Document, franchisees must maintain Business Interruption insurance. The minimum coverage required is 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.

This insurance protects the Red Wagon Club franchisee in the event that their business is temporarily shut down due to unforeseen circumstances such as a fire, natural disaster, or other covered event. It helps to cover the loss of income during the period of closure. The coverage must be for at least 50% of gross sales or cover the actual losses sustained for 12 months, whichever is greater, ensuring that the franchisee can continue to meet financial obligations during the interruption.

The inclusion of an extended period of indemnity for 180 days means that the insurance will continue to cover losses for up to 180 days after the business reopens, accounting for the time it may take to return to pre-interruption revenue levels. The coverage also includes the Franchisor's Program Fees, ensuring that these fees are covered during the business interruption period. This requirement helps protect both the franchisee and Red Wagon Club by ensuring that the franchisee can continue to meet their financial obligations to the franchisor even during a business interruption.