Under what condition might the waiver of subrogation in Section 9.4 not be effective for an Anago Unit Franchise?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 9.4 WAIVER OF SUBROGATION.
Insofar as and to the extent that this Section may be effective without invalidating it or making it impossible to secure insurance coverage obtainable from responsible insurance companies doing business in the state where the Anago Unit Franchise is located (even though an extra premium may result), the parties agree that, for any loss that is covered by insurance then being carried by them, their respective insurance companies have no right of subrogation against the other.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the waiver of subrogation in Section 9.4 may not be effective if it invalidates the insurance coverage or makes it impossible to secure insurance from responsible insurance companies in the state where the Anago Unit Franchise is located. This condition applies even if securing the necessary insurance coverage requires paying an extra premium.
In simpler terms, Anago and the franchisee agree to waive their rights to have their insurance companies pursue claims against each other for losses covered by insurance. However, this agreement is contingent on it being feasible to obtain insurance that allows for this waiver. If the waiver makes it impossible to get insurance coverage from a reputable company in the franchisee's state, then the waiver may not be enforced.
This clause protects both Anago and the franchisee by ensuring that they maintain adequate insurance coverage. It acknowledges that in some cases, a complete waiver of subrogation might conflict with standard insurance practices or state regulations. Therefore, the clause includes a provision that allows for the waiver to be adjusted to comply with insurance requirements, even if it means paying a higher premium. Prospective franchisees should verify with their insurance provider that a waiver of subrogation is permissible and what impact, if any, it has on their insurance rates.