Who must Chocolate Bash franchisees list as an additional insured on their insurance policies?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and noncontributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees are required to list Chocolate Bash and its affiliates as an additional insured on their insurance policies, excluding Workers Compensation. This requirement is part of the broader insurance obligations outlined in the Franchise Agreement and the Chocolate Bash Manual.
This stipulation means that Chocolate Bash and its affiliates are protected under the franchisee's insurance policies, offering them coverage against potential liabilities arising from the franchisee's operations. Additionally, the franchisee's insurance must include a waiver of subrogation in favor of Chocolate Bash and its affiliates, preventing the insurance company from pursuing claims against them. The franchisee's insurance must also be primary and noncontributing with any insurance carried by Chocolate Bash or its affiliates, meaning the franchisee's policy pays out first in the event of a claim.
Furthermore, Chocolate Bash requires that they receive 30 days' prior written notice of any policy cancellation, allowing them time to ensure continuous coverage and protect their interests. These insurance requirements are typical in franchising, as franchisors seek to mitigate risks associated with franchisee operations and protect their brand. Franchisees should carefully review these requirements to ensure they obtain adequate coverage and comply with Chocolate Bash's stipulations.