Is an Anago subfranchisor required to obtain insurance coverage through the Anago National Insurance program during the entire term?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
is 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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a subfranchisor is required to obtain insurance coverage through the Anago National Insurance program during the entire term of the agreement. The subfranchisor is responsible for securing and maintaining the required insurance policies at their own expense. These policies must protect both the subfranchisor and Anago, including their officers, directors, partners, and employees, from any losses, liabilities, personal injuries, property damage, or expenses arising from the subfranchisor's obligations under the agreement.
The insurance policies must name Anago as an additional insured and provide Anago with notification of any premium payment defaults or policy changes that reduce coverage, with a 30-day written notice prior to termination, cancellation, expiration, or alteration. The subfranchisor is responsible for paying all deductibles in the event of a claim. If the subfranchisor fails to maintain the required insurance, Anago has the option to procure insurance coverage on behalf of the subfranchisor, and the subfranchisor will be required to reimburse Anago for all premiums and expenses incurred.
The Anago National Insurance program is provided to the subfranchisor at the actual cost to maintain the insurance policy (Insurance Premium), which is paid to Anago or its designee. The insurance plans are subject to change, modification, and/or cancellation, with future changes in premiums, coverages, and other changes to be detailed in the manuals or in writing by Anago. This requirement ensures that both the subfranchisor and Anago are adequately protected against potential liabilities and risks associated with the operation of the Anago franchise.