Besides the insurance policies required during the Initial Term, what other insurance requirements might Chatime impose on the Franchisee?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) From the date of this Agreement and at all times during the Initial Term (including, if appropriate, the New Term), Franchisee must at its cost take out and maintain in full force and effect the Insurance Policies with reputable insurers which comply with all Legal Requirements and on terms and conditions acceptable to Franchisor.
- (2) Franchisee must also maintain in force all other insurance of the types, in the amounts, and with such terms and conditions as Franchisor may from time to time reasonably prescribe, in the Operations Manual or otherwise.
- (3) The Insurance Policy must:
- (a) Name Franchisor and its Affiliates that it designates as additional insured parties;
- (b) Contain a waiver of all subrogation rights against Franchisor, its Affiliates, and their successors and assigns;
- (c) Contain primary and noncontributory provisions, and be occurrence-based with per-location aggregate;
- (d) B
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, in addition to maintaining insurance policies during the Initial Term, Chatime franchisees must also maintain any other insurance types, amounts, terms, and conditions that Chatime may reasonably prescribe from time to time. These additional requirements will be outlined in the Operations Manual or otherwise communicated to the franchisee.
These insurance policies must be held with reputable insurers and comply with all legal requirements, with terms and conditions acceptable to Chatime. Furthermore, the insurance policy must name Chatime and its affiliates as additional insured parties, include a waiver of all subrogation rights against Chatime and its affiliates, and contain primary and noncontributory provisions. The policy must also be occurrence-based with per-location aggregate coverage.
It is important for prospective Chatime franchisees to understand that insurance requirements can change over time, and they must remain compliant with any updates to avoid being in breach of their franchise agreement. Additionally, some property owners may require higher levels of commercial general liability insurance or other insurance coverage under their leases, adding another layer of potential insurance obligations for the franchisee.