Must Gold Star Chili be named as an additional insured on all insurance policies?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies must name Gold Star Chili as an additional insured franchisor and contain and include standard waivers of subrogation. Franchisee agrees franchisee's insurance is primary and non-contributory. You cannot commence construction upon or open your Restaurant until you have obtained all the required insurance coverage and provided Gold Star with appropriate certificates of insurance showing your compliance with the requirements set forth above. If you fail to obtain and maintain this insurance coverage, we have the right to procure it on your behalf and to charge you for the cost plus interest. We have the right to increase the minimum coverage, decrease the maximum deductible, or require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances. We must give you at least 30 days' written notice.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, all insurance policies that a franchisee obtains must name Gold Star Chili as an additional insured franchisor. These policies must also include standard waivers of subrogation, and the franchisee's insurance is required to be primary and non-contributory. This requirement ensures that Gold Star is protected under the franchisee's insurance policies in the event of a claim.
Before commencing construction or opening the restaurant, the franchisee must provide Gold Star with certificates of insurance demonstrating compliance with these insurance requirements. If a franchisee fails to obtain and maintain the required insurance coverage, Gold Star has the right to procure the insurance on the franchisee's behalf and charge the franchisee for the cost, plus interest. This provision allows Gold Star to ensure that all franchisees maintain adequate insurance coverage, protecting both the franchisee and the Gold Star brand.
Gold Star also retains the right to modify the insurance requirements, including increasing minimum coverage, decreasing maximum deductibles, or requiring different or additional kinds of insurance. However, Gold Star must provide the franchisee with at least 30 days' written notice before implementing any changes to the insurance requirements. This flexibility allows Gold Star to adapt to changing circumstances, such as inflation or changes in liability standards, while providing franchisees with sufficient time to adjust their insurance coverage accordingly.