What evidence of insurance is a Churchs Chicken sublessee required to provide to the sublessor, and when must it be delivered?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Evidence of Insurance.
Sublessee shall deliver only to the Sublessor certificates evidencing said policy or policies of insurance prior to the date of any use or occupancy of the Premises by Sublessee and thereafter (after annual renewal).
Sublessee's general liability policy shall name Sublessor, Master Landlord and its designees as additional insureds.
Sublessee's property policy shall name Sublessor and its Lender as loss payee.
Sublessor shall be the sole certificate holder.
- (f) Insurance Certificate Requirements.
Sublessee shall deliver to Sublessor, and no other party other than Sublessor, a property certificate naming Sublessor as loss payee and liability certificate naming Sublessor as additional insured.
No policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Sublessor.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a sublessee must provide certificates evidencing their insurance policies to the sublessor. These certificates must be delivered before any use or occupancy of the premises and upon annual renewal of the policies. The sublessee's general liability policy must name the sublessor, master landlord, and their designees as additional insureds, while the property policy must name the sublessor and its lender as loss payee. The sublessor is designated as the sole certificate holder.
The insurance certificate must include a statement from the insurer guaranteeing at least 30 days' prior written notice to the sublessor before any cancellation or material alteration of the policy. This requirement ensures that the sublessor is promptly informed of any changes to the insurance coverage, allowing them to take necessary steps to protect their interests.
These stipulations are typical in franchise agreements to protect the franchisor (or, in this case, the sublessor) from potential liabilities and losses associated with the franchisee's (or sublessee's) operations. By requiring specific insurance coverage and naming the sublessor as an additional insured or loss payee, the agreement ensures that the sublessor's financial interests are safeguarded in the event of an incident or claim. The advance notice of cancellation or modification further enhances this protection by providing the sublessor with time to address any gaps in coverage.