What waiver must the Chatime franchisee's insurance policy contain?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisee's insurance policy must include a waiver of all subrogation rights against Chatime, its affiliates, and their successors and assigns. This requirement ensures that the insurance company cannot pursue Chatime for any claims they pay out to the franchisee.
In practical terms, this means that if a covered event occurs at the Chatime location and the franchisee makes a claim, the insurance company is prohibited from seeking compensation from Chatime, even if Chatime's actions contributed to the event. This protects Chatime from potential liability and financial risk related to incidents at franchised locations.
Additionally, the insurance policy must name Chatime and its designated affiliates as additional insured parties. The policy must contain primary and noncontributory provisions and be occurrence-based with per-location aggregate. The insurance must be provided by an A- VII or higher AM Best-rated carrier and provide for 30 days' prior written notice to Chatime of any material modification or cancellation.