Sunday, November 28

What Types of Insurance Might My Franchise Location Need?

When you invest in a franchise business, you are becoming a real business owner. Some may think that it’s not really like starting your own business since you are buying into an existing business and being provided with many of the resources you are going to need. However, when you sign a contract with a franchisor, you are accepting ownership of your location. you will be responsible for running it successfully and ensuring you are running it properly and legally.

If you are interested in owning a business but want the support and security of owning a franchise, there are many franchise opportunities available to you in nearly every industry. You can choose a restaurant, retail store, or service provider. You can choose if you want a brick-and-mortar business or an online business. There are endless opportunities for you to choose from, and the best approach is to start with one you are interested in and then talking to current franchisees to see how they feel about their business.

If you choose a business that includes a brick-and-mortar location, you will need to put a lot of work into preparing your location and making sure you have everything lined up correctly. For example, you’ll need to have inspections done by the local municipality for safety, fire, and likely electrical. You will need to look into any local regulations that may impact your business or your ability to do business in the community. You will also need to look into insurance. Here are a few types of insurance, you may need to have.

1. Property

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If you own the property or building that your business is going to be located on, you will need property insurance to protect your investment from natural disasters, fires, and other unexpected disasters. This is similar to homeowners’ insurance, but for investments or business properties. As the property owner, you will be financially liable for damage to the property. If you have a mortgage on the property, your lender will require you to carry property insurance.

2. Mixed-Use

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If you have a property that contains both commercial space and a residential unit, you will need mixed-use insurance. This is designed to cover damage to both the business and the residential unit. Investing in a mixed-use property is a really good investment idea because it provides multiple revenue streams. You can run your franchise in part of it and rent the other part out for additional income, or you can live in the other part to reduce overall expenses.

3. General Liability

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Liability insurance will cover your business from potential lawsuits caused by unhappy customers or customer injuries while on your property. Your insurance company can work with you to get the policy that is best for you and your business. There are bundled options for businesses to ensure all of their insurance needs are being met without several individual policies in place. Comprehensive coverage will provide all or nearly all of your business insurance needs.

4. Loss of Income

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Loss of Income insurance is critical to your long-term success if something happens. While the property insurance will cover expenses caused by damage, it will not cover the loss of business you may incur if you need to be shut down for weeks or even months due to the needed repairs. Loss of income insurance will provide your business with coverage of the income being lost.

For example, if you have a fire and your business is closed down for six weeks while repairs are being made, this insurance will provide the average income for the six-week period based on past business. This insurance will prevent the business from going bankrupt during a crisis.