Are the insurance policies required for Cinnaholic franchisees required to provide for waivers of subrogation?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
aim. This indemnity will continue in effect after the expiration or termination of this Agreement. Under no circumstances will Franchisor or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate its or their losses and expenses, in order to maintain and recover fully a claim against Franchisee.
- 18.2. Insurance. Franchisee agrees to secure and maintain during the term of this Agreement, at its own cost, the following insurance policies by carriers approved by Franchisor:
- (i) Such insurance as may be required by the terms of any lease for the Franchised Site or, if there is no such lease, Franchisee agrees to carry fire and extended coverage insurance covering the building and all equipment, supplies, products, inventory, furniture, fixtures and other tangible property located in the Bakery or on the Franchised Site in the amount of the full insurable value of such property.
- (ii) Commercial General Liability Insurance, including coverages for productscompleted operations, contractual liability, personal and advertising injury, fire damage, medical expenses, and dram shop/liquor liability, having a combined single limit for bodily injury and property damage of $1,000,000 per occurrence and $2,000,000 in the aggregate (except for fire damage and medical expense coverages, which may have different limits of not less than $300,000 for one fire and $5,000 for one person, respectively); plus (ii) non-owned automobile liability insurance and, if Franchisee owns, rents or identifies any vehicles with any Mark or vehicles are used in connection with the operation of the Bakery, automobile liability coverage for owned, non-owned, s
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are required to secure and maintain several insurance policies. One of these is Commercial General Liability Insurance, which must include coverages for various liabilities with specific limits. The combined single limit for bodily injury and property damage must be $1,000,000 per occurrence and $2,000,000 in the aggregate, with exceptions for fire damage and medical expense coverages, which may have different limits of not less than $300,000 for one fire and $5,000 for one person, respectively.
In addition to Commercial General Liability Insurance, franchisees must also maintain non-owned automobile liability insurance. If the franchisee owns, rents, or identifies any vehicles with any Mark or vehicles are used in connection with the operation of the Bakery, they need automobile liability coverage for owned, non-owned, scheduled, and hired vehicles having a combined single limit of $1,000,000 per occurrence. Furthermore, franchisees are required to have excess liability umbrella coverage for the general liability and automobile liability coverages in an amount of not less than $2,000,000 per occurrence and aggregate.
All of these coverages must be on an occurrence basis, and importantly, they must provide for waivers of subrogation. This means that Cinnaholic franchisees must ensure that their insurance policies include a waiver of subrogation, which prevents the insurance company from pursuing claims against Cinnaholic in the event of a loss. This requirement protects Cinnaholic from potential liabilities and ensures that the franchisee's insurance covers any incidents related to the operation of the Cinnaholic bakery.