What waiver must each insurance policy for a Red Wagon Club franchise contain?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
Each insurance policy for liability coverage must name us and any affiliates or lenders we designate as additional named insureds, using a form of endorsement that we have approved, and provide for 30 days' prior written notice to us of a policy's cancellation. Each insurance policy must contain a waiver of all subrogation rights against us, our subsidiaries, affiliates, and ours and their successors and assigns, and the coverage shall be primary and non-contributory to any insurance that we carry. You must furnish us with a compliant certificate of insurance no less than 45 days after you sign your franchise agreement, but before you begin operations of your RWC Business, and 20 days prior to any renewal of insurance or whenever we request and be provided by an insurance company and broker approved by us.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, each insurance policy must include a waiver of all subrogation rights against Red Wagon Club, its subsidiaries, affiliates, and their successors and assigns. Additionally, the insurance coverage must be primary and non-contributory to any insurance that Red Wagon Club carries.
This requirement means that if a franchisee's insurance company pays out a claim, the insurance company cannot then seek to recover those costs from Red Wagon Club or its related entities. The franchisee's insurance is the first line of defense, and Red Wagon Club's own insurance is secondary. This protects Red Wagon Club from potential liabilities arising from the franchisee's operations.
Furthermore, the franchisee must provide Red Wagon Club with a certificate of insurance 45 days after signing the franchise agreement, but before beginning operations. This certificate must also be provided 20 days before any insurance renewal or whenever Red Wagon Club requests it. The insurance company and broker must be approved by Red Wagon Club. This ensures that Red Wagon Club is kept up-to-date on the franchisee's insurance coverage and has the opportunity to verify that the coverage meets their requirements.