Does Cilantro Taco Grill specify the insurance coverage that franchisees must purchase?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall obtain, at a minimum, the additional insurance coverages Franchisor requires.
All required insurance policies shall name Franchisor and their affiliates and their members, officers, agents and employees as additional insureds as their interests may appear.
All public liability policies shall contain a provision that the additional insureds, although named as insureds, shall nevertheless be entitled to recover under such policies on any loss caused by Franchisee or Franchisee's servants, agents or employees, and all required insurance policies shall contain a waiver of subrogation in favor of the additional insureds.
Source: Item 10 — Initial Inventory. This estimate is for the cost of the initial inventory sufficient for approximately 3 months of operation. Your initial inventory will include ingredients and supplies, containers, cleaning products, and other disposables. (FDD pages 21–22)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill FDD, franchisees are required to obtain additional insurance coverages that the franchisor requires. Cilantro Taco Grill also mandates that all required insurance policies name the Franchisor and their affiliates as additional insureds. These policies must contain a provision that allows the additional insureds to recover under the policies for any loss caused by the franchisee or their employees, and they must include a waiver of subrogation in favor of the additional insureds.
This means that franchisees must secure insurance coverage beyond standard requirements, and these policies must specifically protect Cilantro Taco Grill from liabilities arising from the franchisee's operations. The franchisee is responsible for ensuring that the insurance policies cover potential losses caused by their actions or those of their employees, and that Cilantro Taco Grill's right to claim against the policy is protected.
It is important for prospective franchisees to clarify with Cilantro Taco Grill the specific types and amounts of insurance coverage required to ensure full compliance and adequate protection for both the franchisee and the franchisor. Understanding these insurance obligations is a crucial part of assessing the overall cost and risk associated with the franchise.