Must a Carbones Pizzeria franchisee name the franchisor as an additional insured on their insurance policies?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
erwise approve those changes.
You must carry the types and amounts of insurance we specify and you must name us an additional incurred (other than the workers compensation policy), and provide us 30 days notice before any change,
cancellation or termination of any policy. You must carry the following policies and minimum amounts of coverages:
| Commercial General Liability | $1,000,000 limit per occurrence $2,000,000 aggregate | |
|---|---|---|
| Business Personal Property | Replacement cost coverage | |
| Business Motor Vehicle | $1,000,000 combined single limit of liability per occurrence | |
| Liability | $1,000,000 uninsured/underinsured motorist coverage | |
| Workers’ Compensation | Policy limits pursuant to applicable state law | |
| Umbrella/Excess Liability | $1,000,000 limit per occurrence $1,000,000 aggregate | |
| Liquor Liability | $1,000,000 limit per occurrence $2,000,000 aggregate | You and other franchisees m |
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 12–13)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, franchisees are required to name the franchisor as an additional insured on their insurance policies, with the exception of workers' compensation policies. Additionally, franchisees must provide Carbones Pizzeria with 30 days' notice before any changes, cancellations, or terminations of any insurance policy.
Carbones Pizzeria specifies the types and minimum amounts of insurance coverage that franchisees must maintain. These policies include Commercial General Liability with limits of $1,000,000 per occurrence and $2,000,000 aggregate, Business Personal Property with replacement cost coverage, Business Motor Vehicle Liability with $1,000,000 combined single limit per occurrence, and Liability with $1,000,000 uninsured/underinsured motorist coverage. Franchisees must also carry Workers’ Compensation with policy limits pursuant to applicable state law, Umbrella/Excess Liability with limits of $1,000,000 per occurrence and $1,000,000 aggregate, and Liquor Liability with limits of $1,000,000 per occurrence and $2,000,000 aggregate.
This requirement ensures that Carbones Pizzeria is protected from potential liabilities arising from the franchisee's operations. Naming the franchisor as an additional insured is a common practice in franchising, as it provides an added layer of security for the franchisor. The franchisee bears the cost of this insurance coverage.
It is important for prospective Carbones Pizzeria franchisees to understand these insurance requirements and factor the costs of these policies into their financial projections. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement.