Must Extreme Art Studio and its affiliates be named as additional insureds on the insurance policies?

According to Extreme Art Studio's 2024 Franchise Disclosure Document, with the exception of employment liability insurance policies, each insurance policy must name Extreme Art Studio and any affiliates it designates as additional named insureds. These policies must also provide for 30 days' prior written notice to Extreme Art Studio of any material modification, cancellation, or expiration of the policy.

Furthermore, each insurance policy must contain a waiver of all subrogation rights against Extreme Art Studio, its affiliates, and their successors and assigns. Prior to commencing any renovations or construction at the Extreme Art Studio Business, the franchisee must provide Extreme Art Studio with a certificate of insurance for the builder's risk insurance required.

These requirements ensure that Extreme Art Studio is protected against potential liabilities arising from the franchisee's operations. The additional insured status and waiver of subrogation rights provide Extreme Art Studio with direct coverage and protection under the franchisee's insurance policies. The 30-day notice allows Extreme Art Studio time to ensure continued coverage in case of changes or cancellation. These stipulations are typical in franchising, as franchisors seek to mitigate risks associated with their franchisees' business activities.