Does Chocolate Bash require a waiver of subrogation in its favor?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 obtain specific insurance coverage, and these policies, with the exception of Workers Compensation, must include a waiver of subrogation in favor of Chocolate Bash and its affiliates. This means that if Chocolate Bash is responsible for a loss covered by the franchisee's insurance, the insurance company cannot sue Chocolate Bash to recover the claim amount paid out.
The insurance policies must also list Chocolate Bash and its affiliates as additional insureds, ensuring they are protected under the franchisee's insurance coverage. Furthermore, the franchisee's insurance must be primary and noncontributing with any insurance carried by Chocolate Bash or its affiliates, meaning the franchisee's insurance will be the first to respond to a claim.
Finally, Chocolate Bash requires that they receive 30 days' prior written notice of cancellation of the franchisee's insurance policies. This allows Chocolate Bash to ensure continuous coverage and protect their interests. The franchisee must maintain (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.