Is a waiver of subrogation provision required in the insurance policy for a Buff City Soap franchise?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
r modifications to the Manuals or otherwise in writing. You shall not place a new order for any Non-Proprietary Products with a supplier after receiving written notice of changes in the Non-Proprietary Products' specifications or that our approval of the supplier has been withdrawn or revoked.
Insurance
The insurance requirements described below are for a single Makery. If you own multiple Makeries, you must meet the insurance requirements below for each Makery and "per Makery location" aggregate limits when multiple Makeries are insured under single comprehensive general liability policy (capitalized terms not defined in Exhibit I of the Franchise Agreement have the meanings set forth in the Agreement). All insurance policies must:
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- be issued by a responsible carrier or carriers that has received and maintains an A.M. Best rating of at least A-VI (or comparable ratings from a reputable insurance rating service, in the event such A.M. Best ratings are discontinued or materially altered), and otherwise approved by Franchisor;
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- contain a waiver of subrogation provision;
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- other than Workers' Compensation, name us as and additional insured on a primary basis for operations of BCS Makery. If the additional insured has other insurance applicable to a loss, it will be on an excess or contingent basis. The additional insured's insurance coverage will not be reduced by the existence of such other insurance;
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- not have any deductible, self-insured retention, self-funded retention, or any similar provision unless pr
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 29–32)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, all insurance policies obtained by franchisees must contain a waiver of subrogation provision. This requirement is part of a broader set of insurance stipulations that Buff City Soap mandates for its franchisees to ensure adequate coverage and protection for both the franchisee and the franchisor.
In practical terms, a waiver of subrogation means that the insurance company cannot seek to recover claim payments from a third party who may have caused the loss. In the context of a Buff City Soap franchise, this could protect the franchisor from being pursued by the franchisee's insurance company for damages if the franchisor's actions contributed to the loss. This requirement is fairly common in franchising, as franchisors often want to shield themselves from potential liabilities related to the franchisee's operations.
In addition to the waiver of subrogation, Buff City Soap also requires that the franchisor be named as an additional insured on a primary basis (excluding Workers' Compensation) and that the insurance policies be issued by carriers with an A.M. Best rating of at least A-VI. The policies must also provide 30 days' prior written notice to Buff City Soap of any material modification, cancellation, or expiration. These stipulations collectively ensure that Buff City Soap has a degree of oversight and protection regarding the insurance coverage maintained by its franchisees. Franchisees should carefully review all insurance requirements with their insurance broker to ensure full compliance and adequate protection.