Does maintaining insurance relieve a Gold Star franchisee of liability under the indemnity provisions?

According to Gold Star's 2025 Franchise Disclosure Document, maintaining the required insurance does not relieve a franchisee of liability under the indemnity provisions of the franchise agreement. Specifically, while franchisees must secure and maintain insurance policies protecting both themselves and Gold Star against various losses, liabilities, and claims, this insurance coverage does not limit their obligations to indemnify Gold Star.

This means that even if a franchisee has insurance in place, they may still be responsible for covering Gold Star's losses, expenses, and legal fees arising from the franchisee's operation of the business. The franchisee's indemnification obligations exist separately from, and are not reduced by, any insurance coverage they maintain.

This is a critical point for prospective Gold Star franchisees to understand. They should carefully review the indemnity provisions in the franchise agreement and consult with legal counsel to fully grasp the scope of their potential liabilities. Franchisees need to budget and plan not only for insurance premiums but also for the possibility of having to cover additional costs through indemnification, even if an insurance policy is in place. This is fairly typical in franchise agreements, as franchisors seek to protect themselves from liabilities arising from the actions of their franchisees.