To whom should a Churchs Chicken sublessee deliver certificates evidencing insurance policies?
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.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a sublessee is required to deliver certificates evidencing their insurance policies to the sublessor. The sublessee must provide these certificates before any use or occupancy of the premises and annually upon renewal of the policies. The sublessor is also to be named as loss payee on the property insurance certificate and as an additional insured on the liability certificate.
This requirement ensures that the sublessor is protected against potential losses or liabilities arising from the sublessee's operations. By receiving the insurance certificates, the sublessor can verify that the sublessee has adequate coverage in place, including property insurance, commercial general liability insurance, and business interruption insurance. The insurance policies must be issued by companies with a minimum rating of "A" in Best's Insurance Guide and authorized to do business in the state where the premises are located.
Furthermore, the insurance policies must not be canceled or altered without at least thirty days' prior written notice to the sublessor. This provision allows the sublessor to take necessary steps to protect their interests if the sublessee's insurance coverage is at risk of being terminated or modified. The sublessor also has the right to require the sublessee to make insurance payments in advance into an escrow account held by the sublessor, providing an additional layer of financial security.
For a potential Churchs Chicken franchisee considering a sublease, it is crucial to understand these insurance requirements and ensure compliance to avoid any breaches of the sublease agreement. Failure to provide the required insurance certificates or maintain adequate coverage could result in penalties or even termination of the sublease. Therefore, franchisees should carefully review the insurance provisions in the sublease agreement and consult with an insurance professional to obtain the necessary coverage and documentation.