Who must be named as additional insureds on each insurance policy for an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Each insurance policy shall: (1) name us and each of our affiliates, directors, agents and employees (as we may specify) as additional insureds (unless we specify otherwise in writing) on a primary, noncontributory basis and provide a waiver of subrogation rights against us; (2) provide for 30 days' prior written notice to us of any material modification, cancellation, or expiration of the policy; and (3) provide that coverage applies separately to each insured. In the case of property insurance, the Franchisor parties shall be named as their interests may appear. Insurance carriers must be authorized to do business in the state where your Franchise is located, be rated at least A-X with A.M. Best and approved by us. At our discretion, we may require you to purchase your insurance from a specific insurance carrier.
Certificates of Insurance shall name us, and each of our affiliates, directors, agents and employees (as we may specify) as additional insureds (unless we specify otherwise in writing), and include primary, noncontributory and waiver of subrogation endorsements. Certificates shall provide 30 days' notice prior written notice to us of any material modification, cancellation, or expiration of the policy, and due in our office 30 days prior to expiration and coverages listed above.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, each insurance policy must name Afuri Ramen Dumpling and each of its affiliates, directors, agents, and employees (as they may specify) as additional insureds. This requirement can be waived by Afuri Ramen Dumpling in writing. The insurance coverage must be on a primary, noncontributory basis and provide a waiver of subrogation rights against Afuri Ramen Dumpling. In the case of property insurance, the Franchisor parties shall be named as their interests may appear. Certificates of Insurance shall name Afuri Ramen Dumpling, and each of its affiliates, directors, agents and employees (as they may specify) as additional insureds (unless they specify otherwise in writing), and include primary, noncontributory and waiver of subrogation endorsements. Certificates shall provide 30 days' notice prior written notice to Afuri Ramen Dumpling of any material modification, cancellation, or expiration of the policy, and due in their office 30 days prior to expiration and coverages listed above.
This requirement ensures that Afuri Ramen Dumpling is protected from potential liabilities arising from the franchisee's operations. By being named as an additional insured, Afuri Ramen Dumpling can directly benefit from the franchisee's insurance coverage in the event of a claim. The primary and noncontributory basis means that the franchisee's insurance policy will be the first to respond to a claim, and Afuri Ramen Dumpling's insurance will not be required to contribute. The waiver of subrogation rights prevents the insurance company from pursuing Afuri Ramen Dumpling to recover any payments made on a claim.
For a prospective Afuri Ramen Dumpling franchisee, this means they will need to ensure their insurance policies include the appropriate endorsements and coverage to meet these requirements. Failure to comply with these insurance obligations could result in a breach of the franchise agreement. The franchisee will also need to provide certificates of insurance to Afuri Ramen Dumpling as proof of coverage and to ensure that Afuri Ramen Dumpling receives timely notice of any changes to the policy.