Must the insurer waive subrogation rights against Budget for a Budget licensee's insurance?

According to Budget's 2025 Franchise Disclosure Document, Budget licensees are required to maintain insurance policies that name Budget and its affiliates as additional insureds. Furthermore, the insurance provider must waive any subrogation rights they might possess against Budget. This requirement is part of the insurance obligations outlined in Paragraph 9.4 of the agreement.

In practical terms, this means that if a Budget licensee's insurance company pays out a claim for which Budget might be liable, the insurer cannot then sue Budget to recover those costs. The waiver of subrogation protects Budget from potential financial liabilities arising from the licensee's operations and ensures that Budget is shielded from claims that the insurance company might otherwise pursue.

This requirement is fairly common in franchising, as it protects the franchisor's brand and financial stability. Prospective Budget franchisees should ensure they understand this requirement and factor it into their insurance costs. They should also confirm that their insurance carrier is willing to provide this waiver, as not all insurers offer this type of coverage.