For Churchs Chicken, must each insurance policy extend to and provide indemnity for all obligations and liabilities of the Developer to third parties?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
** The following general requirements shall apply to each insurance policy that Developer is required to maintain under this Agreement:
- (1) Each insurance policy shall be specifically endorsed to provide that the coverages shall be primary and that any insurance carried by any additional insured shall be excess and noncontributory. The applicable limits of each insurance policy shall be exhausted before any benefits (defense or indemnity) may be obtained under any other insurance (including self-insurance) providing coverage to Cajun. In the event payments are required to be made under Cajun's own insurance policies or selfinsurance (whether for defense or indemnity) before the applicable coverage
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, each insurance policy that a developer is required to maintain must extend to and provide indemnity for all obligations and liabilities of the developer to third parties. Additionally, the policy must cover all other items for which the developer is required to indemnify Cajun under the agreement.
This requirement ensures that Churchs Chicken developers have adequate insurance coverage to protect themselves and third parties from potential liabilities arising from their operations. It also protects Cajun by ensuring that the developer's insurance covers any obligations for which the developer must indemnify Cajun.
Furthermore, the insurance policies must be written by an insurance company with an "A" or better rating from Best's Insurance Rating Service, and no policy can have a deductible exceeding $5,000 unless Cajun approves it in writing. The developer's co-insurance under any policy must be 80% or greater, and all liability insurance policies must be written on an "occurrence" policy form. These stipulations ensure the financial stability and reliability of the insurance coverage.