Besides workers compensation, who must be named as an additional insured in Carls liability policies?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
A. Franchisee shall be responsible for all loss or damage arising from or related to Franchisee's development and operation of the Franchised Restaurant, and for all demands or claims with respect to any loss, liability, personal injury, death, property damage, or expense whatsoever occurring upon the premises of, or in connection with the development or operation of, the Franchised Restaurant. Franchisee shall, at its sole expense, maintain in full force and effect throughout the term of this Agreement that insurance which Franchisee determines is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of the Franchised Restaurant which shall include, at a minimum, insurance policies of the kinds, and in the amounts, required by Section 15.B. CJR, and any entity with an insurable interest designated by CJR, shall be an additional insured in such liability policies, except for workers' compensation/employer's liability, and loss payee for property to the extent each has an insurable interest.
(6) In connection with any construction, leasehold improvements, renovation, refurbishment, or remodeling of the Franchised Restaurant, Franchisee's general contractor shall maintain Commercial General Liability insurance (with products liability and independent contractors coverage), Automobile Liability coverage for owned, leased, hired and non-owned vehicles, and Builder's Risk with limits no less than $1,000,000, with CJR named as an additional insured, as well as Workers' Compensation and Employer's Liability as required by state law.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, besides workers' compensation/employer's liability, CJR (Carls Jr. Restaurants, LLC) and any entity with an insurable interest designated by CJR must be named as an additional insured in the franchisee's liability policies. This requirement ensures that Carls and its affiliates are protected under the franchisee's insurance coverage for liabilities related to the restaurant's operations.
This requirement means that if a claim arises due to the franchisee's restaurant operations, Carls and its designated entities will also be covered by the franchisee's insurance policy. This protects Carls from potential financial losses resulting from lawsuits or other claims related to the franchisee's business. The franchisee is responsible for ensuring that these entities are included as additional insured parties in their liability policies.
Furthermore, in connection with any construction, leasehold improvements, renovation, refurbishment, or remodeling of the Franchised Restaurant, the franchisee's general contractor shall maintain Commercial General Liability insurance with CJR named as an additional insured. This extends the protection to Carls during any construction or renovation activities at the franchised location, ensuring coverage for potential liabilities arising from these activities.
It is important for prospective Carls franchisees to understand these insurance requirements and factor in the costs of obtaining the necessary coverage, including adding Carls and its affiliates as additional insured parties. Failure to comply with these requirements could result in Carls procuring the insurance and charging the cost to the franchisee, as detailed in Section 15.F of the Franchise Agreement.