Does City Wide need to be named as an additional insured on the franchisee's insurance policy?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.1 Franchisee will procure, at Franchisee's sole expense and maintain in full force and effect during the Term of this Agreement, an insurance policy or policies protecting Franchisee and CITY WIDE, and their officers, directors, partners and employees against any loss, liability, personal injury, death, or property damage or expense whatsoever arising or occurring upon or in connection with the Franchised Business, as CITY WIDE may reasonably require for its own and Franchisee's protection. Franchisee must name CITY WIDE as an additional insured in such policy or policies.
- 17.2 Such policy or policies will be written by an insurance company satisfactory to CITY WIDE in accordance with standards and specifications set forth in the Operating Manual or otherwise in writing, and will include, at a minimum (except as different coverages and policy limits may reasonably be specified for all franchisees from time to time by CITY WIDE in the Operating Manual or otherwise in writing) the following: comprehensive general liability insurance, hired/non-hired auto coverage, general liability umbrella policy, cyber insurance, employee dishonesty/crime policy, errors and omissions insurance, employment practices liability insurance, workers' compensation insurance (as determined by state of Franchised Business location), and business interruption insurance. The insurance afforded by the policy or policies respecting liability will not be limited in any way by reason of any insurance which may
be maintained by CITY WIDE. Within six (6) months after the signing of this Agreement, but in no event later than the date on which Franchisee acquires an interest in the real property on which Franchisee will develop and operate the Franchised Business, Franchisee must furnish CITY WIDE for approval a certificate of insurance showing compliance with the foregoing requirements. Such certificate will state that such policy or policies will not be canceled or altered without at least thirty (30) days prior written notice to CITY WIDE and will reflect proof of payment of premiums. Franchisee will also submit copies of such insurance policies. Maintenance of such insurance and the performance by Franchisee of the obligations under this Section 17.3 will not relieve Franchisee of liability under the indemnity provision set forth in this Agreement. Minimum coverage limits may be published in the Operating Manual and may be modified from time to time, as conditions require, by written notice from CITY WIDE to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees are required to procure and maintain insurance policies that protect both the franchisee and City Wide, including their respective officers, directors, partners, and employees. This insurance coverage is intended to cover any loss, liability, personal injury, death, property damage, or expense arising from the operation of the franchised business.
Specifically, the franchisee must name City Wide as an additional insured on these insurance policies. This requirement ensures that City Wide is protected under the franchisee's insurance coverage for any claims related to the franchised business's operations. The policies must be written by an insurance company that City Wide approves and must adhere to the standards and specifications outlined in the Operating Manual or in writing.
The required insurance coverage includes, but is not limited to, comprehensive general liability insurance, hired/non-hired auto coverage, a general liability umbrella policy, cyber insurance, an employee dishonesty/crime policy, errors and omissions insurance, employment practices liability insurance, workers' compensation insurance (as determined by the state of the franchised business location), and business interruption insurance. The franchisee must provide City Wide with a certificate of insurance for approval within six months of signing the agreement, but no later than when the franchisee acquires an interest in the real property where the business will operate. This certificate must confirm that the policy will not be canceled or altered without at least thirty days' prior written notice to City Wide and must include proof of premium payment.
If a franchisee fails to maintain the required insurance coverage, City Wide has the right, but not the obligation, to procure the necessary insurance and charge the franchisee for the coverage, including expenses incurred by City Wide in obtaining the insurance. The franchisee is also required to promptly notify City Wide of any actual, potential, or threatened claims under any insurance policy and must allow City Wide to assume the defense of any such claim at City Wide's discretion.