What entities must Hyper Kidz franchisees name as additional insureds on their insurance policies?

According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are required to include specific entities as additional named insureds on their insurance policies. Specifically, Hyper Kidz and its Affiliates must be named as additional insureds. Additionally, the insurance policies must contain a waiver of all subrogation rights against Hyper Kidz, its Affiliates, and their respective successors and assigns. This requirement ensures that Hyper Kidz and its related entities are protected under the franchisee's insurance coverage.

This requirement is a standard practice in franchising, as it protects the franchisor from potential liabilities arising from the franchisee's operations. By being named as additional insureds, Hyper Kidz and its Affiliates can directly benefit from the franchisee's insurance coverage in the event of a claim. The waiver of subrogation rights further prevents the insurance company from pursuing claims against Hyper Kidz and its Affiliates, even if their actions contributed to the loss.

For a prospective Hyper Kidz franchisee, this means they will need to ensure their insurance policies include the appropriate endorsements to add Hyper Kidz and its Affiliates as additional insureds and waive subrogation rights. This may increase the cost of the insurance premiums, and the franchisee should factor this into their financial planning. It is also important for the franchisee to understand the definition of "Affiliates" as defined in the franchise agreement to ensure all necessary entities are included in the insurance coverage.

The franchisee must also provide evidence of the required insurance coverage to Hyper Kidz no later than fifteen (15) days before the Hyper Kidz Business opens. Furthermore, the franchisee must supply a complete copy of each insurance policy no more than thirty (30) days after Hyper Kidz requests it. Upon renewal of each insurance policy, the franchisee must furnish evidence of each renewal or replacement insurance policy and evidence of payment of the premiums.