Does Cream assume liability for damages arising from the operation of the franchisee's shop?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to indemnify, defend, and hold harmless us, our affiliates, and each of our and their respective affiliates, owners, directors, managers, officers, employees, agents, successors, and assignees (the "Indemnified Parties") against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of: (i) the development and operation of your Shop; (ii) the business you conduct under this Agreement; (iii) your breach of this Agreement; (iv) your employment practices, instituted by your employees or by others; and/or (v) the actions or omissions of you, your owners, or your and their respective representatives, unless (and then only to the extent that) the claims, obligations, or damages are determined to be caused solely by the Indemnified Party's intentional misconduct in a final, unappealable ruling issued by a court with competent jurisdiction or arbitrator. For purposes of this indemnification, "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, regardless of whether litigation or alternative dispute resolution is commenced.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream does not assume liability for damages arising from the operation of a franchisee's shop under normal circumstances. Instead, the franchisee is required to indemnify Cream against claims and damages.
Specifically, the franchisee must indemnify, defend, and hold harmless Cream, its affiliates, and their respective owners, directors, managers, officers, employees, agents, successors, and assignees (referred to as the "Indemnified Parties") from all claims, obligations, and damages that directly or indirectly arise from (i) the development and operation of the franchisee's shop; (ii) the business the franchisee conducts under the Franchise Agreement; (iii) the franchisee's breach of the Franchise Agreement; (iv) the franchisee's employment practices; and/or (v) the actions or omissions of the franchisee, their owners, or their representatives.
This indemnification covers all obligations, damages (actual, consequential, or otherwise), and costs that Cream reasonably incurs in defending any claim, including accountant, arbitrator, attorney, and expert witness fees, costs of investigation, court costs, travel and living expenses, and other litigation expenses. The franchisee's obligation to indemnify Cream is only excused if the claims, obligations, or damages are determined to be caused solely by Cream's intentional misconduct in a final, unappealable ruling by a court or arbitrator with competent jurisdiction.