What subrogation rights must Hyper Kidz franchisees waive in their insurance policies?

According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees must ensure their insurance policies include a waiver of all subrogation rights against Hyper Kidz, its affiliates, and their respective successors and assigns. This requirement is part of the broader insurance obligations franchisees must meet to operate a Hyper Kidz Business.

In practical terms, this waiver means that if Hyper Kidz is responsible for a loss covered by the franchisee's insurance, the insurance company cannot sue Hyper Kidz to recover the claim payment. This protects Hyper Kidz from potential liability and ensures that the franchisee's insurance primarily covers any incidents involving Hyper Kidz's negligence or fault.

This type of waiver is a standard practice in franchising, as it aims to shield the franchisor from liability related to the franchisee's operations. Franchisees should understand that while this protects Hyper Kidz, it does not reduce the franchisee's coverage or ability to file claims for their own losses. Franchisees should consult with their insurance provider to ensure they fully understand the implications of waiving subrogation rights and how it affects their coverage.

Furthermore, the insurance policies must name Hyper Kidz and its affiliates as additional named insureds, provide thirty days' prior written notice of any material modification, cancellation, or expiration of the policy, and ensure the coverage applies separately to each insured. The franchisee is responsible for maintaining sufficient insurance coverage and providing evidence of such coverage to Hyper Kidz, with Hyper Kidz retaining the right to increase coverage amounts or require different types of insurance.