Must Cilantro Taco Grill be named as an additional insured on the franchisee's insurance policies?

According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, franchisees are required to name Cilantro Taco Grill as an additional insured on their insurance policies. Specifically, all general liability and property damage policies must include Cilantro Taco Grill, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees as additional named insureds. These policies must also include a waiver of subrogation in favor of all those parties.

This requirement means that if a claim is made against the franchisee's business that is covered by these insurance policies, Cilantro Taco Grill would also be protected under the same policies. A waiver of subrogation prevents the insurance company from pursuing Cilantro Taco Grill to recover any payments made on a claim.

For a prospective Cilantro Taco Grill franchisee, this requirement increases the cost of insurance, as adding additional insured parties typically results in higher premiums. It is a fairly standard practice in franchising to protect the franchisor from liabilities arising from the franchisee's operations. Franchisees should obtain quotes from multiple insurance providers to ensure they are getting competitive rates while meeting Cilantro Taco Grill's insurance requirements.