Does Chocolate Fish Coffee require a waiver of subrogation in favor of them and their affiliates?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards 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) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) 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 non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notic
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 16–18)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees are required to obtain specific insurance policies, and these policies (excluding Workers Compensation) must include a waiver of subrogation in favor of Chocolate Fish Coffee and its affiliates. This means that if a franchisee's insurance company pays out a claim for a loss that Chocolate Fish Coffee or its affiliates caused, the insurance company cannot then sue Chocolate Fish Coffee or its affiliates to recover the money.
The required insurance policies include "Special" causes of loss coverage, business interruption insurance covering at least 12 months of income, Commercial General Liability insurance (not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit), and Business Automobile Liability insurance (not less than $1,000,000).
Additionally, the franchisee's insurance policies must list Chocolate Fish Coffee and its affiliates as an additional insured, be primary and non-contributing with any insurance carried by Chocolate Fish Coffee or its affiliates, and stipulate that Chocolate Fish Coffee receive 30 days' prior written notice of cancellation. This ensures that Chocolate Fish Coffee is protected by the franchisee's insurance coverage and receives advance notice if the coverage is terminated.