The meaning of "Franchise" is as follows:

  "In the event of a franchise of 5% being applicable on a loss of GBP1OO" which means that any loss less than GBP5 is payable by the insured not the insurer, and loss of GBP5 and over is payable by the (1)( ) insurer/( ) insured and the (2)( ) insurer/( ) insured is not liable.