What subrogation rights requirement applies to the insurance carrier for 1 800 Packouts franchisees?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies required hereunder must name us and our officers, directors and employees as additional insureds, contain a waiver by the insurance carrier of all subrogation rights against us and must provide that we will receive 30 days' advance written notice of termination, expiration or cancellation or modification of any such policy.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the insurance policies that franchisees are required to maintain must include a waiver by the insurance carrier of all subrogation rights against 1 800 Packouts and its officers, directors, and employees.
In practical terms, this means that if 1 800 Packouts is found liable for damages covered by the franchisee's insurance policy, the insurance company cannot seek to recover the claim amount from 1 800 Packouts. This protects 1 800 Packouts from potential financial liabilities arising from incidents at the franchisee's business.
This requirement is a fairly common practice in franchising, as it aims to shield the franchisor from liability related to the franchisee's operations. Franchisees should understand this requirement and ensure their insurance policies comply to avoid potential breaches of the franchise agreement.