What are some examples of liabilities that Anago's Subfranchisor is responsible for indemnifying the Franchisor against?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
h default or otherwise) of this Agreement, Subfranchisor shall deliver all Client lists and Client Accounts to Franchisor, including any and all documentation relating thereto and Subfranchisor shall have no further rights therein.
Section 3.7 - Insurance
- (a) Subfranchisor will procure and maintain in full force and effect during the Term, at Subfranchisor's sole expense, an insurance policy or policies, as required by Franchisor, including coverage protecting Subfranchisor and Franchisor, and their officers, directors, partners and employees, against any loss, liability, personal injury, death, or property damage or expense arising from Subfranchisor's obligations under this Agreement. The Subfranchisor is required to obtain insurance coverage through the Anago National Insurance program during the entire Term. All liability policies will name Franchisor as the additional insured and will provide that Franchisor will receive notice of Subfranchisor's default in payment of any premium and 30 days' prior written notice of termination, cancellation, expiration or alteration to provide less coverage. The insurance afforded by any liability policy will not be limited in any way by reason of any insurance maintained by Franchisor. Subfranchisor is responsible for payment of all deductibles, should a claim arise.
- (b) The policy or policies will be written by a licensed insurance company and will include, at a minimum, commercial general casualty insurance and general liability insurance, including products liability, property damage, owned and non-owned motor vehicle coverage, and personal injury coverage with a combined single limit of $1,000,000, with an umbrella policy of $2,000,000, unless otherwise agreed in writing by Franchisor, an "Errors and Omissions" policy with
$1,000,000 coverage as well as workers' compensation insurance for accident or disease in an amount not less than $500,000 per employee.
- (c) If Subfranchisor fails to procure and maintain any required insurance coverage or furnish satisfactory evidence of insurance, Franchisor, in addition to its other remedies, may, but need not, procure insurance coverage for Subfranchisor, who will pay Franchisor on demand the amount of any premiums and expenses incurred by Franchisor in obtaining the insurance.
- (d) Subfranchisor must require all Unit Franchisees to obtain coverage of the types and amounts as required by Franchisor, protecting Franchisor and Subfranchisor against any and all claims, damages or harm caused by the Unit Franchise operations. Franchisor will at its option obtain insurance for any and all Unit Franchisees that do not produce proof of coverage and charge Subfranchisor for that coverage. Subfranchisor agrees that it shall be solely responsible to monitor the Unit Franchisee compliance with the insurance requirements and will forward any and all proof of coverage to Franchisor at its request.
- (e) The Anago National Insurance program is provided to the Subfranchisor at a charge of the actual cost to maintain the insurance policy (Insurance Premium), which shall be paid to Franchisor or its designee. The plans will be subject to change, modification, and/or cancellation. Future changes in premiums, coverages and other changes will be set forth in the Manuals or in writing by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Subfranchisor is responsible for securing and maintaining insurance policies that protect both the Subfranchisor and Anago, including their officers, directors, partners, and employees. This insurance coverage extends to any loss, liability, personal injury, death, property damage, or expense that arises from the Subfranchisor's obligations under the Subfranchise Agreement. The Subfranchisor is obligated to obtain this insurance through the Anago National Insurance program for the entire term of the agreement. These liability policies must name Anago as an additional insured party and provide Anago with notice of any default in premium payments or any changes to the policy that would reduce coverage. The Subfranchisor is responsible for covering all deductibles should a claim occur.
The required insurance policies must be written by a licensed insurance company and include commercial general casualty insurance and general liability insurance. This includes coverage for products liability, property damage, owned and non-owned motor vehicle coverage, and personal injury coverage, with a combined single limit of $1,000,000, and an umbrella policy of $2,000,000, unless Anago agrees otherwise in writing. Additionally, the Subfranchisor needs an "Errors and Omissions" policy with $1,000,000 coverage, as well as workers' compensation insurance for accident or disease with a minimum of $500,000 coverage per employee.
Furthermore, the Subfranchisor is responsible for indemnifying Anago regarding the selection or designation of any Unit Area of Operation for each Unit Franchisee within their Area. The Subfranchisor is also obligated to ensure that each Unit Franchise within the Area is operated strictly according to the standards of the Anago System, as detailed in the Unit Franchise Agreement and the Anago Manuals. If Anago or its affiliates incur expenses to enforce or defend a Unit Franchise Agreement within the Area, the Subfranchisor must reimburse Anago for all associated costs and expenses, including arbitration or mediation fees, court costs, reasonable attorneys' fees, and travel expenses.