What entities must be named as additional insureds in the liability policies for a Carls Jr. franchise, excluding workers' compensation/employer's liability?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
With respect to the Commercial General Liability, Automobile Liability and Umbrella/Excess Liability policies, CJR and its affiliates shall be named as Additional Insured on a primary and non-contributory basis. With respect to the Commercial Property coverage, CJR and its affiliates shall be named as Loss Payee.
In connection with any construction, leasehold improvements, renovation, refurbishment, or remodeling of the Franchised Restaurant, Developer'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 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, CJR (Carl's Jr. Restaurants LLC), and any entity with an insurable interest designated by CJR, must be named as additional insureds in the franchisee's liability insurance policies, with the exception of workers' compensation/employer's liability coverage. This requirement ensures that Carls Jr. and its designated entities are protected under the franchisee's insurance policies for liabilities related to the development and operation of the franchised restaurant.
Specifically, with respect to the Commercial General Liability, Automobile Liability and Umbrella/Excess Liability policies, CJR and its affiliates must be named as Additional Insured on a primary and non-contributory basis. This means that in the event of a claim, the franchisee's insurance policy will be the primary coverage, and Carls Jr.'s insurance (if any) will be excess and non-contributory. This protects Carls Jr. from having to use its own insurance to cover claims arising from the franchisee's operations.
For Commercial Property coverage, CJR and its affiliates must be named as Loss Payee. This means that in the event of a covered loss to the property, Carls Jr. will be entitled to receive payment from the insurance company to the extent of its insurable interest. This protects Carls Jr.'s investment in the franchised restaurant. During construction, leasehold improvements, renovation, refurbishment, or remodeling of the Franchised Restaurant, Developer's general contractor shall maintain Commercial General Liability insurance and Automobile Liability coverage for owned, leased, hired and non-owned vehicles, with CJR named as an additional insured.