Is Cinnaholic required to be named as an additional insured under the franchisee's insurance policies?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that Franchisor shall be named as an additional insured under each of the foregoing insurance policies. Before the opening of the Bakery and, thereafter, at least 30 days before the expiration of any such policy or policies, Franchisee shall deliver to Franchisor certificates of insurance evidencing the proper coverage with limits not less than those required hereunder, and all such certificates shall expressly contain endorsements requiring the insurance company to give Franchisor at least 30 days written notice in the event of material alteration to termination, non-renewal, or cancellation of, the coverages evidenced by such certificates and notice of any claim filed under such policy within 30 days after the filing of such claim. Franchisor may, from time to time, during the term of this Agreement, at its sole option, require that the minimum limits and types of insurance coverage, as specified above, be increased or changed as determined solely by Franchisor. If Franchisee at any time fails or refuses to maintain any insurance coverage required by Franchisor or to furnish satisfactory evidence thereof, Franchisor, at its option and in addition to its other rights and remedies hereunder, may, but need not, obtain such insurance coverage on behalf of Franchisee, and Franchisee shall pay to Franchisor on demand any premiums incurred by Franchisor in connection therewith. Franchisee's obligation to obtain and maintain, or cause to be obtained and maintained, the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by Franchisor, nor shall Franchisee's performance of that obligation relieve it of liability under the indemnity provisions set forth in Section 18.1 hereof. Notwithstanding the existence of such insurance, Franchisee, as agreed above, is and shall be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the franchised business and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic franchisees are required to include Cinnaholic as an additional insured party on all insurance policies that the franchisee is required to secure.
Before opening their Cinnaholic bakery, and at least 30 days before the expiration of any insurance policy, franchisees must provide Cinnaholic with certificates of insurance. These certificates must demonstrate adequate coverage and include endorsements that require the insurance company to notify Cinnaholic at least 30 days in advance of any significant changes, termination, non-renewal, or cancellation of the coverage. The certificates must also include notification of any claim filed under such policy within 30 days after filing.
Cinnaholic retains the right to modify the minimum limits and types of insurance coverage required, based on its sole discretion. If a franchisee fails to maintain the required insurance coverage or provide satisfactory evidence of coverage, Cinnaholic has the option to obtain the necessary insurance on behalf of the franchisee, and the franchisee is obligated to reimburse Cinnaholic for any premiums incurred. The franchisee's insurance obligations are not limited by any insurance Cinnaholic may maintain, and the franchisee remains responsible for all losses, damages, and liabilities related to the operation of the franchised business, regardless of the existence of insurance coverage.