Who must Degree Wellness franchisees name as additional insureds on their commercial general liability and professional liability (malpractice) insurance policies?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
All commercial general liability insurance and professional liability (malpractice) insurance policies you purchase must name us (and, if we so request, our members, directors, employees, agents, and affiliates) as additional insureds. If you fail to obtain or maintain the insurance we specify, we may (but need not) obtain the insurance for you and the Studio on your behalf (see Item 6). You should consult with your own insurance agents, brokers, and attorneys to determine what types of coverages and what level of insurance protection you may need or desire, in addition to the coverages and minimum limits specified by us. The cost of your premiums will depend on the insurance carrier's charges, terms of payment, and your insurance and payment histories.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 26–29)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are required to name specific parties as additional insureds on their commercial general liability and professional liability (malpractice) insurance policies. Specifically, Degree Wellness (the franchisor) must be named as an additional insured. Furthermore, if Degree Wellness requests, franchisees must also name Degree Wellness's members, directors, employees, agents, and affiliates as additional insureds on these policies. This requirement ensures that Degree Wellness and its related parties are protected from potential liabilities arising from the franchisee's operations.
This requirement is a fairly standard practice in franchising, as it provides an added layer of protection for the franchisor against potential lawsuits or claims related to the franchisee's business. By being named as an additional insured, Degree Wellness can directly access the franchisee's insurance coverage in the event of a covered claim. This can help to mitigate financial risks and protect the brand's reputation.
It is important for prospective Degree Wellness franchisees to understand this insurance requirement and factor the cost of adding these additional insureds into their overall business expenses. Franchisees should consult with their insurance agents to obtain quotes and ensure that their policies comply with Degree Wellness's requirements. Failure to maintain the required insurance coverage could result in Degree Wellness obtaining the insurance on the franchisee's behalf, as detailed in Item 6 of the FDD, potentially at a higher cost to the franchisee.