COISoftware collects a certificate of insurance from every franchisee, reads each ACORD 25 with AI, checks the coverage against your franchise agreement, and confirms the franchisor is named as additional insured. Built for US franchisors who carry brand and balance-sheet risk when one location is underinsured. Upload a franchisee COI above to see it read in seconds.
Last updated June 2026
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Franchise agreements vary, but most franchisors require a similar core of coverages with the franchisor named as additional insured. These are common starting points, not legal advice.
| Coverage | Common requirement | Why the franchisor cares |
|---|---|---|
| Commercial general liability | Often $1M per occurrence / $2M aggregate | Customer injury or property damage at a location is the claim most likely to reach the franchisor |
| Additional insured endorsement | Franchisor entity named on the GL policy | Lets the franchisor tender a claim to the franchisee carrier instead of paying it |
| Workers compensation | Statutory limits per state | An injured franchisee employee can pull the brand into the claim without it |
| Commercial property / business personal property | Replacement cost of the buildout and equipment | Protects the brand experience and any franchisor interest in the buildout |
| Commercial auto | Often $1M combined single limit where vehicles are used | Delivery and mobile-service brands carry real auto exposure at every unit |
| Umbrella / excess liability | Commonly $1M to $5M depending on the brand | Raises total limits for higher-risk concepts and severe-injury claims |
Set requirements to your own franchise agreement, FDD and state law. Limits and coverages shown are common starting points, not legal or insurance advice.
A franchisor can owe a duty of care across dozens or hundreds of independently owned locations, yet only controls the coverage on paper. Proving every franchisee is actually insured is where the exposure hides.
Each location is independently owned and buys its own insurance on its own renewal date. A central spreadsheet of certificates goes stale the moment one franchisee renews, and no one notices until a claim.
When a customer is hurt at a franchised location, the plaintiff names the franchisor too. If that location let coverage lapse or never named you as additional insured, the brand absorbs a loss it required the franchisee to insure.
Your franchise agreement requires the franchisor entity named as additional insured, but a checked box on a certificate is not the endorsement. The gap surfaces only when a carrier denies your tender after an incident.
A growing system signs new franchisees every quarter, each needing the right coverage in place before opening day. Onboarding insurance by email and folder does not scale with the development pipeline.
Each location hires its own contractors, delivery, and maintenance vendors. The franchisor often requires those downstream COIs too, and tracking second-tier certificates by hand is effectively impossible.
Your master program carrier, a lender, or franchise counsel can ask for current proof of coverage across the system on any date. Pulling that together from scattered PDFs takes days you do not have.
The Franchise Disclosure Document and franchise agreement set the insurance a franchisee must carry, but a requirement on page 40 of the FDD does nothing unless someone confirms each location bought the coverage, kept it current, and named the franchisor correctly. That verification work, reading each certificate, checking limits against the agreement, confirming the additional insured endorsement, and watching every renewal date, is repetitive and rules-based, which is exactly what software handles well. Certificate of insurance management software reads every franchisee certificate, checks it against your requirements, and flags anything that lapses or comes up short.
COISoftware reads every franchisee certificate, checks it against your franchise agreement, confirms additional insured status, and watches renewals across the whole system.
Upload a certificate from any location and the AI pulls the insurer, policy numbers, coverage types, limits, effective and expiration dates, and additional insured status, even from scans and phone photos.
Group certificates by unit, owner, region or brand so you can see compliance for one location, one multi-unit operator, or the entire system at a glance.
Set the general liability, property, workers compensation and umbrella limits your franchise agreement requires. Every certificate is checked and flagged the moment a limit is short or a coverage is missing.
See whether the franchisor entity is named as additional insured on each policy, so the endorsement you require is verified rather than assumed from a ticked box.
Automated reminders at 60, 30 and 15 days mean a lapsing franchisee policy is caught before the coverage gap, not after an incident at the location.
Every certificate, its extracted data and its compliance status are stored together, so you can show a master carrier, lender or counsel exactly what each location carried on any date.
COISoftware reads the ACORD 25 and the broader certificate of liability insurance, then ties each franchisee certificate into full certificate of insurance management software and ongoing vendor insurance compliance tracking. When a franchisee certificate looks off, the same checks behind certificate of insurance verification flag it for review.
From onboarding a new franchisee to keeping a national system compliant, the workflow is the same four steps.
Enter the coverages and limits your franchise agreement requires, including the additional insured wording that names the franchisor entity. You can set different requirements for different brands or unit types.
Tip: Pull the exact limits and endorsement language straight from your current franchise agreement and FDD.
Request a COI from each franchisee, or upload the certificates you already hold. The AI reads every certificate automatically, so onboarding a new unit does not mean manual data entry.
Each certificate is checked against the requirement for that location. Short limits, missing coverages and an absent additional insured endorsement are flagged for review before the unit opens or renews.
Automated reminders track every expiration date and chase renewals before coverage lapses, so a growing system stays compliant without a manual calendar per location.
Anyone responsible for proving that every location in the system carries the coverage the franchise agreement requires.
The team that writes the insurance article of the franchise agreement is the team that has to enforce it. COISoftware turns the requirement into a live status for every location, so you can see at a glance which franchisees are compliant, which have a short limit, and which are about to lapse, without chasing PDFs by email.
An operator running fifteen units still has to keep each one insured and each certificate current. The same dashboard works for a single multi-unit operator, so a regional owner can prove every location is covered to the franchisor on demand.
New units need coverage confirmed before opening day, and the development pipeline never stops. Centralized intake means a new franchisee certificate is read, checked and filed the moment it arrives. To collect, verify and monitor every certificate in one place, pair this with vendor insurance compliance software, and if you are comparing platforms, our best COI tracking software roundup walks through the options honestly.
Franchisors require COIs to confirm each independently owned location actually carries the coverage the franchise agreement demands, so an injury or loss at a unit is paid by the franchisee carrier rather than the brand. A current certificate is also documentary proof of coverage if a claim, audit or lawsuit later names the franchisor.
Most franchise agreements require commercial general liability, workers compensation, commercial property and, where vehicles are used, commercial auto, often with umbrella coverage on top. The franchisor is almost always required to be named as additional insured. The exact limits are set by your franchise agreement and state law, so always verify against the current document.
An additional insured endorsement adds the franchisor entity to the franchisee general liability policy, which lets the franchisor tender a claim to the franchisee insurer instead of paying it. A checkbox on the certificate is not the endorsement itself, so franchisors should confirm the actual endorsement form is in place, not just the certificate notation.
Smaller systems track certificates in a spreadsheet, but most franchisors move to COI tracking software once the unit count grows past a couple dozen. Software reads each certificate, checks the coverage against the franchise agreement, confirms additional insured status, stores it by location, and sends automated renewal reminders, which removes the manual entry and missed lapses spreadsheets invite.
If a franchisee policy lapses, an incident during the gap may be uninsured, leaving the franchisor exposed as the deep pocket and the franchisee in breach of the franchise agreement. COISoftware sends reminders at 60, 30 and 15 days before expiration and flags lapsed certificates, so you can act before the gap becomes a loss.
Yes. Naming the franchisor as additional insured on each franchisee general liability policy is standard practice and usually required by the franchise agreement, because it gives the brand a direct route to the franchisee coverage when a claim names the franchisor. Tracking software confirms the status on every certificate so no location slips through uncovered.
A common baseline is $1M per occurrence and $2M aggregate in general liability, statutory workers compensation, property at replacement cost, and a $1M to $5M umbrella for higher-risk concepts. The right number depends on the brand, the activity at each unit and counsel guidance, so set the requirement from your own franchise agreement rather than a generic figure.
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