What provisions must the Chatime franchisee's insurance policy contain?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
compensation insurance and personal expenses.
- (2) Franchisor must give Franchisee a reasonable period of notice of meetings and conferences.
- (3) The location, agenda, duration, and all procedures and formats of each meeting and conference will be determined by Franchisor.
5.3 Insurance
- (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) Be provided by an A- VII or higher AM Best-rated carrier;
- (e) Provide for 30 days' prior written notice to Franchisor of any material modification, cancellation, or expiration of such policy; and
- (f) Include coverage for a minimum liability of no less than the amount specified by Franchisor.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain insurance policies that meet specific criteria. These policies must be active from the date of the Franchise Agreement and throughout the Initial Term, including any New Term extensions. The insurance must comply with all Legal Requirements and have terms and conditions acceptable to Chatime. Additionally, franchisees must maintain any other insurance types, amounts, and conditions that Chatime may reasonably prescribe in the Operations Manual or elsewhere.
The required insurance policy must name Chatime and its designated Affiliates as additional insured parties. It must also include a waiver of all subrogation rights against Chatime, its Affiliates, and their successors and assigns. The policy should contain primary and noncontributory provisions, be occurrence-based with per-location aggregate coverage, and be provided by an A- VII or higher AM Best-rated carrier.
Furthermore, the insurance policy must provide for 30 days' prior written notice to Chatime in case of any material modification, cancellation, or expiration. The coverage must include a minimum liability of no less than the amount specified by Chatime. Franchisees are obligated to provide Chatime with a copy of the insurance certificates annually and upon request, ensuring that Chatime remains informed about the franchisee's insurance coverage. Franchisees are responsible for the costs associated with obtaining and maintaining the required insurance coverage. Some property owners may require higher levels of commercial general liability insurance or other insurance coverage under their leases.