# FDD insurance requirements codebook (franchise-insurance-requirements, 2026-10-18)

Unit: one FDD per brand from the 259-brand Minnesota CARDS sample published with
/research/franchise-royalty-rates/ (issued 2025-01-24 to 2026-08-18). Source text: pdftotext -layout
output of the FDD PDF, including the attached franchise agreement. Read the Item 8 insurance
paragraphs, the franchise agreement insurance section, Item 6 insurance rows and Item 7 insurance
lines and notes. If the FDD offers several formats, code the standard single-unit franchise
presented first. Record ONLY what the document says. Never infer from industry practice.

When Item 8 (or another Item) and the franchise agreement differ, code the franchise agreement and
note the conflict. When the agreement is silent (for example it defers to the Manual, or its list simply
does not mention a coverage), a requirement, limit, notice period or remedy stated in Item 6, 7 or 8 is
coded (clarified after the blind check). When limits are left to the Manual ("in amounts we specify"), the coverage type is
still coded as required if named, and the limit is null.

## Fields

| Field | Values | Rule |
|---|---|---|
| ins_found | yes / no | The document states any insurance the franchisee must carry. |
| limits_stated | yes / no | At least one minimum dollar limit for any coverage is stated in the FDD or franchise agreement. no = limits only "as we specify" / in the Manual. |
| gl | yes / may / no | Commercial or comprehensive general liability (also "public liability", "premises and products liability", "bodily injury and property damage liability"). **yes** = currently required (including "as required by law" or required only if the activity applies, e.g. "if you have vehicles"). **may** = only recommended, optional, or reserved for the future ("we may require"). **no** = not mentioned. Same three values for every coverage field below. |
| gl_occ | number $ | Minimum per-occurrence (or per-claim, or combined single) limit for general liability. A single unqualified GL amount goes here. |
| gl_agg | number $ | Minimum general aggregate for general liability, if stated. Products/completed operations aggregate is not used unless it is the only aggregate. |
| umb | yes / may / no | Umbrella or excess liability policy. A statement that the GL limits "may be met by a combination of primary and umbrella" without requiring an umbrella = no. |
| umb_limit | number $ | Minimum umbrella or excess limit (per occurrence) stated. |
| auto | yes / may / no | Business automobile liability, including hired and non-owned auto. |
| auto_limit | number $ | Combined single limit or per-accident limit. Split limits (e.g. 100/300/100): the per-accident bodily injury figure, with a note. |
| wc | yes / may / no | Workers' compensation (including "as required by law" and "employer's liability"). |
| cyber | yes / may / no | Cyber liability, network security, privacy liability, data breach or data compromise coverage. Technology E&O alone is coded under prof, not cyber. |
| cyber_limit | number $ | Minimum limit, if stated. |
| epli | yes / may / no | Employment practices liability. |
| epli_limit | number $ | Minimum limit, if stated. |
| prof | yes / may / no | Professional liability, errors and omissions, malpractice, technology E&O. |
| prof_limit | number $ | Minimum per-claim limit, if stated. |
| prop | yes / may / no | First-party property insurance on the premises, improvements, equipment, inventory or contents (fire and extended coverage, all-risk, special form, replacement cost). Builder's risk alone is not prop (record in other_cov). |
| bi | yes / may / no | Business interruption / business income / loss of income insurance. |
| other_cov | list | Semicolon list of other coverages currently REQUIRED: abuse_molestation, liquor, garagekeepers, crime_bond (crime, fidelity, employee dishonesty, surety or janitorial bond), pollution, inland_marine (incl. bailee, care custody control, equipment floater), builders_risk, product_recall, spoilage, life_disability (life, key person, disability), health (employee health), other. |
| addl_insured | yes / no | The franchisor (or its affiliates) must be named as an additional insured (or loss payee for property only = no, with a note). |
| notice_days | number | Days of prior written notice to the franchisor of cancellation, non-renewal or material change. null if not stated. |
| raise_right | yes / no | The franchisor may change, add to or increase the required coverage types or limits. |
| am_best | text | Minimum insurer rating stated (e.g. "A-", "A VIII"); null if none. |
| procure_on_default | yes / no | If the franchisee fails to buy or maintain the insurance, the franchisor may buy it and charge the franchisee. |
| procure_markup_pct | number % | Percentage fee or markup on top of the premium the franchisor charges when it procures on default (e.g. "plus 10%"). null if none stated. |
| procure_fee_text | text | Any other stated charge for franchisor-procured insurance (flat fee, "reasonable administrative fee"), max 15 words. |
| program | franchisor_placed / designated_required / optional / reserved / none | **franchisor_placed** = the franchisor or an affiliate itself buys or places a policy or program for franchisees as a requirement or the standard arrangement (billed separately or covered by fees). **designated_required** = franchisee must currently buy at least one required coverage through an insurer, broker or agency the franchisor designates or approves (a named or listed source). **optional** = franchisor offers, recommends or arranged a program or broker, but the franchisee may use any insurer that meets the standards. **reserved** = only a right to designate a broker or insurer in the future. **none** = no such statement. Hierarchy when several apply: franchisor_placed > designated_required > optional > reserved > none. "Insurer acceptable to us" or a minimum rating alone is none. |
| fr_program | yes / no | The franchisor or an affiliate itself runs, sponsors or offers an insurance program or policy that franchisees can buy or must buy and that the franchisor or affiliate bills or collects for (group program, master policy, captive, franchisor-placed policy), whether optional or required. Procurement only after a default does not count. |
| evidence | text | Verbatim quote, max 40 words, with the general liability limit (or the main requirement). |
| notes | text | Format coded, conflicts, split limits, anything a checker should know. |
| confidence | high / medium / low | |

## Joined fields (not re-coded)

- Item 7 insurance low and high: from /research/franchise-initial-investment/ `fdd_item7.csv`
  (`insurance_low`, `insurance_high` = sum of Item 7 rows categorised as insurance). Rows where insurance is
  bundled with other costs are flagged (`item7_ins_bundled`) and excluded from dollar statistics.
- Item 8 supplier fields (supplier_restriction, fr_revenue, rebates): from /research/franchise-supplier-rebates/
  `fdd_item8.csv`, used for association only.

## Edge rules

- "Comprehensive general liability with limits of at least $1,000,000 per occurrence and $2,000,000 aggregate,
  which may be satisfied with an umbrella" = gl yes, 1,000,000 / 2,000,000, umb no.
- "$2,000,000 combined single limit" for GL = gl_occ 2,000,000, gl_agg null.
- "$1,000,000 per occurrence / $3,000,000 aggregate including umbrella": gl_agg 3,000,000, note.
- An umbrella stated as part of a total ("$1M primary plus $1M umbrella") = umb yes, umb_limit 1,000,000.
- Workers' compensation "as required by law" = wc yes.
- Coverage required only for a non-standard format (e.g. food truck, drive-thru) = may, with a note.
- Clarified after the blind check (applied to every FDD):
  - A right-to-change clause that names umbrella or excess liability (or EPLI, cyber) as an example of a
    coverage the franchisor may add later = may for that coverage.
  - Agreement template wording "all-risk property damage insurance ... against claims of any person" is
    liability wording, not first-party property insurance (prop not coded from it alone).
  - State unemployment insurance is a payroll program and is not coded.
  - Fire legal liability (damage to rented premises) is a general liability sublimit, not other_cov.
  - A coverage named inside a required policy (environmental damage, liquor or host liquor, care custody and
    control) is coded in other_cov; one required "if you sell alcohol" is coded (conditional = yes).
  - notice_days counts notice to the franchisor whether the insurer or the franchisee must give it.
  - Interest charged on the franchisor's outlay is procure_fee_text, not procure_markup_pct.
- Joined field item7_ins_status: standalone (insurance rows only), partly_bundled, bundled_only, none.
  Item 7 dollar statistics use standalone rows only.
- Text fields: en and em dashes inside verbatim quotes are replaced with a plain hyphen (house style).