Is Fat Shack required to be named as an additional insured on all required insurance policies?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
You must procure, maintain and provide evidence of (i) comprehensive general liability insurance including product liability, property damage, personal injury liability, bodily injury coverage and premises/operation liability for the Restaurant Location and its operations with a limit of not less than $1 million per occurrence - $2 million aggregate, written on an occurrence form, or such greater limit as may be required as part of any lease agreement for the Restaurant Location; (ii) automobile liability insurance for owned and non-owned automobiles including personal injury, wrongful death and property damage with single limit coverage in an amount not less than $100,000; (iii) unemployment and worker's compensation insurance with a broad form all-states endorsement coverage sufficient to meet the requirements of the law; and (iv) all-risk personal property insurance in an amount equal to at least 100 percent of the replacement costs of the contents and tenant improvements located at the FAT SHACK Restaurant, less a reasonable deductible. We reserve the right to require that you obtain and maintain, in addition to all other policies of insurance, employment practices insurance in such amount as we specify. All of the required policies of insurance must name us as an additional insured with waiver of subrogation and must provide for a 30 day advance written notice to us of cancellation. Prior to opening your FAT SHACK Restaurant, and within 15 days after each renewal, you must provide us with a certificate of insurance as to the insurance coverage maintained.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, franchisees are required to procure and maintain several types of insurance coverage. These include comprehensive general liability insurance with a limit of not less than $1 million per occurrence and $2 million aggregate, automobile liability insurance with single limit coverage of not less than $100,000, unemployment and worker's compensation insurance, and all-risk personal property insurance in an amount equal to at least 100 percent of the replacement costs. Fat Shack also reserves the right to require franchisees to obtain and maintain employment practices insurance.
An important stipulation is that all required insurance policies must name Fat Shack as an additional insured with waiver of subrogation. This means that Fat Shack is protected under the franchisee's insurance policies, and the insurance company cannot seek to recover costs from Fat Shack in the event of a claim. Furthermore, franchisees must provide Fat Shack with a 30-day advance written notice of cancellation for any of these policies.
Prior to opening a Fat Shack restaurant, and within 15 days after each renewal, franchisees must provide Fat Shack with a certificate of insurance as proof of maintained coverage. This ensures that franchisees maintain the required insurance coverage and that Fat Shack is aware of the coverage details. This requirement is fairly standard in franchising, as it protects the franchisor's brand and reputation from potential liabilities arising from the franchisee's operations.