Does Exit waive rights against the franchisee for damages covered by insurance?

According to Exit's 2025 Franchise Disclosure Document, Exit, the franchisee, and the subfranchisor mutually waive rights against each other for damages, but only to the extent that those damages are covered by insurance. This waiver is designed to avoid disputes over insured losses and streamline the claims process.

This means that if a loss occurs that is covered by an insurance policy, none of the parties (Exit, the franchisee, or the subfranchisor) can sue each other to recover those damages. The recovery would be limited to the insurance coverage. This clause encourages all parties to maintain adequate insurance coverage, as it serves as the primary source of compensation for covered losses.

However, it's important to note that this waiver is limited to the extent of insurance coverage. If damages exceed the insurance coverage limits, or if the damages are not covered by insurance, the parties may still have rights against each other. Franchisees should ensure they understand the scope of their insurance coverage and the potential for liability beyond the policy limits.