factual

What is the franchisee's Burneys Sweets More insurance company required to do in the event of an action?

Burneys_Sweets_More Franchise · 2025 FDD

Answer from 2025 FDD Document

ge. The insurance policies shall name Franchisor and any affiliates, officers, members, owners, and employees Franchisee designates as an "additional insured" and shall expressly protect both Franchisor and Franchisee (and any other additional insured) on a primary and non-contributory basis and shall require the insurer to defend both Franchisee and Franchisor (and any other additional insured) in any action while reserving Franchisor's right to involve counsel of Franchisor's own choosing in protection of its own and system wide interests. Additionally, Franchisee's insurance policy must provide a waiver of subrogation in favor of Franchisor, its successors, assigns, officers, shareholders, and employees, thus waiving on behalf of Franchisee's insurer any right of subrogation by the insurance company against Franchisor and Franchisor's officers, shareholders, and employees. Franchisee understands that doing so does not necessarily furnish Franchisee with protection levels adequate to Franchisee's needs and that Franchisee's obligation to indemnify Franchisor as set forth above in this Agreement may exceed the amount of insurance Franchisee is required to obtain or does obtain. At least thirty (30) days prior to the time any insurance is first required to be carried by Franchisee and at least thirty (30) days prior to opening, Franchisee will deliver or caused to be delivered to Franchisor Certificates of Insurance evidencing the proper coverage with limits not less than those required by this Agreement and evidencing that Franchisor is named as an additional insured under such policy on a primary and non-contributory basis as required in this Agreement. At least thirty (30) days prior to expiration of any such policy, Franchisee shall deliver to Franchisor Certificates of Insurance evidencing that Franchisee has procured proper renewal or replacement coverage with limits not less than those required by this Agreement and reflecting that Franchisor and its affiliates are additional insured under the policy on a primary and non-contributory basis as required herein. All Certificates will expressly provide that at least thirty (30) days' prior written notice will be given to Franchisor in the event of any alteration to, or cancellation of, the coverage evidenced by the Certificates of Insurance. Franchisor, or its insurer, shall have the right to participate in discussions with Franchisee's insurance company or any claimant (in conjunction with Franchisee's insurance company)

Source: Item 22 — CONTRACTS (FDD page 50)

What This Means (2025 FDD)

According to Burneys Sweets More's 2025 Franchise Disclosure Document, the franchisee's insurance policy must defend both the franchisee and Burneys Sweets More (including any other additional insured parties) in any legal action. This defense must be on a primary and non-contributory basis. However, Burneys Sweets More retains the right to involve its own legal counsel to protect its interests and the interests of the entire Burneys Sweets More system.

In addition to defending against legal actions, the franchisee's insurance policy must also include a waiver of subrogation in favor of Burneys Sweets More, its successors, assigns, officers, shareholders, and employees. This waiver prevents the insurance company from pursuing any claims against Burneys Sweets More and related parties on behalf of the franchisee.

Burneys Sweets More has the discretion to increase or modify the required liability limits or require additional types of coverage, including cyber liability coverage, from time to time. It is important to note that the franchisee's obligation to indemnify Burneys Sweets More may exceed the amount of insurance coverage the franchisee is required to obtain or actually obtains. Franchisees must provide certificates of insurance to Burneys Sweets More at least 30 days before the initial insurance is required and 30 days before any policy expiration, demonstrating the required coverage and that Burneys Sweets More is named as an additional insured.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.