Besides the franchisee, who else must be named as additional insureds on the 7 Brew insurance policies?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
You must maintain insurance coverage for the Store at your own expense in the amounts, and covering the risks, we periodically specify. Your insurance carriers must be licensed to do business in the Store's state and be rated A-, VII or higher by A.M. Best and Company, Inc. (or satisfy our other criteria). We have the right periodically to increase the required coverage amounts and/or require different or additional insurance coverage at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or relevant changes in circumstances. Insurance policies must be written in your name and name us (and our parent companies, subsidiaries, and all other affiliates, and our and their respective officers, owners, directors, agents, representatives, and employees) as additional insureds for claims arising from your products and operations. You must provide updated insurance policies and proof of payment to us at least 10 days before the expiration or termination of such policy or policies.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–32)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the franchisee's insurance policies must name several additional insureds. Specifically, 7 Brew (the franchisor) and its parent companies, subsidiaries, and all other affiliates must be listed. This extends to their respective officers, owners, directors, agents, representatives, and employees.
This requirement means that the franchisee's insurance coverage must protect these parties against claims arising from the franchisee's products and operations. This is a common practice in franchising, as it shields the franchisor from potential liabilities related to the franchisee's business. The franchisee is responsible for providing updated insurance policies and proof of payment to 7 Brew at least 10 days before the expiration or termination of the policies.
The franchisee bears the expense of maintaining this insurance coverage, and 7 Brew retains the right to increase the required coverage amounts or require different or additional insurance coverage at any time. These changes can reflect inflation, new risks, changes in law, higher damage awards, or other relevant changes in circumstances. This ensures that the insurance coverage remains adequate over time, but it also means that the franchisee's insurance costs could increase during the term of the franchise agreement.