Who must be named as an additional insured on the insurance policies for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Each insurance policy described in this Section shall name BAB Systems, Inc. (500 Lake Cook Road, Suite 475, Deerfield, Illinois 60015) as additional insured on a primary and noncontributory basis, with respect to policies secured, and shall provide for thirty (30) days' prior written notice to Franchisor of any material modification, cancellation or expiration of such policy, unless prohibited by local insurance regulation.
All policies must have a waiver of subrogation in favor of the Franchisor.
- ii.
Prior to the opening of the BAGELS Store and prior to the expiration of the term of each insurance policy, Franchisee shall furnish Franchisor with a copy of each insurance policy to be maintained by Franchisee for the immediately following term and evidence of the payment of the premium therefor.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, BAB Systems, Inc. (located at 500 Lake Cook Road, Suite 475, Deerfield, Illinois 60015) must be named as an additional insured on a primary and noncontributory basis on the franchisee's insurance policies. This requirement ensures that Big Apple Bagels is protected under the franchisee's insurance coverage for liabilities related to the operation of the franchise.
This requirement means that Big Apple Bagels has a direct claim against the franchisee's insurance policies in the event of a covered loss. The policies must also provide Big Apple Bagels with thirty days' prior written notice of any material modification, cancellation, or expiration, unless prohibited by local insurance regulations, allowing the franchisor time to ensure continuous coverage.
Furthermore, all policies must include a waiver of subrogation in favor of Big Apple Bagels. This prevents the insurance company from pursuing Big Apple Bagels to recover any payments made to the franchisee due to a claim. Franchisees must also provide Big Apple Bagels with copies of their insurance policies and evidence of premium payments before the BAGELS Store opens and before the expiration of each policy term, ensuring ongoing compliance with these insurance requirements. These stipulations are typical in franchising to protect the franchisor from liabilities arising from the franchisee's operations.