What subrogation rights must be waived in the insurance policies of a Bft franchisee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies must waive any subrogation rights or other rights to assert a claim back against Franchisor and shall contain a clause requiring notice to Franchisor thirty (30) days in advance of any cancellation or material change or cancellation to any such policy.
Franchisee shall give Franchisor certificates of coverage at least annually.
Failure to obtain or the lapse of any of the required insurance coverage shall be grounds for the immediate termination of this Agreement pursuant to Section 15.1, and Franchisee agrees that any losses, claims or causes of action arising after the lapse of or termination of insurance coverage will be the sole responsibility of Franchisee and that Franchisee will hold Franchisor harmless from all such losses, claims and/or causes of action.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, all insurance policies that a franchisee obtains must waive any subrogation rights or other rights to assert a claim against Bft. This requirement is designed to protect Bft from potential claims that the franchisee's insurance company might otherwise bring against them.
In practical terms, this means that if a covered event occurs at the franchisee's studio, and the insurance company pays out a claim, the insurance company cannot then turn around and sue Bft to recover those costs. This waiver is a standard practice in franchising, intended to shield the franchisor from liability related to the franchisee's operations.
Additionally, the insurance policies must include a clause requiring the insurance company to notify Bft thirty days in advance of any cancellation or material change to the policy. The franchisee is also required to provide Bft with certificates of coverage annually. Failure to maintain the required insurance coverage can result in immediate termination of the Franchise Agreement, and the franchisee will be solely responsible for any losses, claims, or causes of action arising after the lapse or termination of insurance coverage, agreeing to hold Bft harmless from such events.