Is subrogation permitted against the Gold Star Company in the franchisee's insurance policies?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
18.1 General Insurance. FRANCHISEE shall procure before the commencement of construction of the Retail Location and maintain in full force and effect during the term of this Agreement and any extension or renewal thereof, at its sole cost and expense, an insurance policy or policies protecting FRANCHISEE and the COMPANY and their respective officers, directors and employees against any and all losses, liabilities, claims, costs and expenses from fire, personal injury, theft, death, property damage, or other damaging or injurious occurrence, arising out of or in connection with the condition, operation, use or occupancy of the Business and the Retail Location. The COMPANY shall be named as an additional insured in all such policies and there shall be no subrogation of any person to any claims against the COMPANY. Such policy or policies shall be written by a responsible insurance company or companies and shall be in such form and contain such limits of liability as shall be satisfactory to the COMPANY. Such policy or policies shall conform with the requirements set forth in the Manual or otherwise in writing from the COMPANY. The insurance afforded by the aforementioned public liability policies shall not be limited in any way by reason of any insurance which may be maintained by the COMPANY.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain insurance policies that protect both the franchisee and Gold Star against various losses, liabilities, claims, costs, and expenses. These policies must cover fire, personal injury, theft, death, property damage, and other damaging occurrences related to the business and retail location.
Specifically, Gold Star requires that the franchisee's insurance policies name Gold Star as an additional insured. Furthermore, the insurance policies must not allow for subrogation against Gold Star. This means that the insurance company cannot pursue Gold Star to recover any claims paid out under the franchisee's policy.
This requirement protects Gold Star from potential liabilities and ensures that the franchisee's insurance coverage is the primary source of protection for both parties. The franchisee bears the cost of these insurance policies, and the policies must be satisfactory to Gold Star in terms of form and liability limits. Franchisees must provide certificates of insurance to Gold Star before construction commences and before the retail location opens for business.