What are the insurance obligations of a Cd One Price Cleaners franchisee?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisor and its affiliates), with each store receiving one (1) vote.
Franchisee agrees to submit to Franchisor and the Cooperative any reports that Franchisor or the Cooperative requires. The Cooperative will operate solely to collect and spend Cooperative contributions for the purposes described above. The Cooperative and its members may not use any advertising, marketing or promotional programs or materials without Franchisor's prior written consent.
10. INSURANCE
10.1 Franchisee's Insurance Obligation. Franchisee shall procure, prior to the Store's grand opening, and shall maintain in full force and effect at all times during the Term, at Franchisee's expense, an insurance policy or policies against any demand or claim with respect to personal and bodily injury, death or property damage, or any loss, liability or expense whatsoever arising or occurring at or in connection with the Store, including, without limitation, the insurance as set forth in the Manual. In addition, in connection with any construction, renovation, refurbishment or remodeling of the Store, Franchisee shall maintain Builder's All Risks insurance and performance and completion bonds. All such policy or policies shall: (i) be written by insurer(s) acceptable to Franchisor and have an A.M. Best rating of A-VII or greater; (ii) name Franchisor, its affiliates, and their respective owners, officers, employees and agents as additional insureds; (iii) comply with the insurance requirements prescribed by Franchisor at the time such policies are obtained; (iv) provide at least the types and minimum amounts of coverage specified in the Manual; and (v) contain a waiver by Franchisee and its insurers of their subrogation rights against Franchisor and its affiliates, and their respective owners, officers, employees and agents. Franchisee shall obtain prior acts coverage for a period of two (2) years following expiration or termination of this Agreement. Franchisor may periodically increase the
amounts of coverage required under such policy or policies and/or require different or additional insurance coverage at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
- 10.2 Franchisee's Insurance Obligation Not Affected by Franchisor's Insurance. Franchisee's obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by Franchisor or its affiliates, nor shall Franchisee's performance of that obligation relieve it of liability under the indemnity provisions of this Agreement or any related agreement.
- 10.3 Additional Required Endorsements. All insurance policies shall contain a provision stating that Franchisor, although named as an additional insured, shall nevertheless be entitled to recover under such policies on any loss occasioned to Franchisor, its affiliates, or their respective owners, officers, employees and agents by reason of their negligence. At Franchisor's option, all insurance policies shall name Franchisor or its affiliates as a loss payee.
- 10.4 Certificates of Insurance. At least ten (10) days prior to the time any insurance is first required to be carried by Franchisee, and thereafter at least thirty (30) days prior to the expiration of any policy, Franchisee shall deliver to Franchisor certificates of insurance evidencing the proper types and minimum amounts of coverage. All Certificates shall expressly provide that no fewer than thirty (30) days' prior written notice shall be given Franchisor in the event of material alteration to or cancellation or non-renewal of the coverages evidenced by such Certificates. Certificates evidencing the insurance required by this Section 10.4 shall name Franchisor, each of its affiliates, and their respective owners, officers, employees, agents and such other persons as Franchisor shall specify from time to time as additional insureds, and shall expressly provide that any interest of each shall not be affected by any breach by Franchisee of any policy provisions for which such Certificates evidence coverage.
- 10.5 Franchisor's Right to Secure Insurance on Behalf of Franchisee.
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, franchisees must secure and maintain insurance policies throughout the term of the agreement. This insurance must cover claims related to personal and bodily injury, death, property damage, or any loss, liability, or expense occurring at the store. The specific types and minimum amounts of coverage are detailed in the Manual. Additionally, franchisees must maintain Builder's All Risks insurance and performance and completion bonds during any construction, renovation, refurbishment, or remodeling of the store.
The insurance policies must be written by insurers acceptable to Cd One Price Cleaners, with an A.M. Best rating of A-VII or greater. Cd One Price Cleaners, its affiliates, and their respective owners, officers, employees, and agents must be named as additional insureds on the policies. The policies must also comply with the insurance requirements prescribed by Cd One Price Cleaners and include a waiver of subrogation rights against Cd One Price Cleaners and its affiliates. Franchisees are also required to obtain prior acts coverage for two years following the expiration or termination of the franchise agreement.
Cd One Price Cleaners retains the right to periodically increase the required coverage amounts or require different or additional insurance coverage to reflect inflation, new risks, changes in law, higher damage awards, or other relevant changes. The franchisee's insurance obligations are not affected by any insurance maintained by Cd One Price Cleaners. Franchisees must provide certificates of insurance to Cd One Price Cleaners at least ten days before the initial insurance requirement and thirty days before any policy expiration. These certificates must provide for at least thirty days' prior written notice to Cd One Price Cleaners in the event of material alteration, cancellation, or non-renewal of coverage. If a franchisee fails to maintain the required insurance, Cd One Price Cleaners has the right, but not the obligation, to procure the insurance and charge the premium and associated expenses to the franchisee.