What does the Commercial Property Insurance for a Cream franchise need to cover?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Policy/Coverage Type | Minimum Limits |
|---|---|
| Commercial Property Insurance | Full replacement cost value of all leasehold improvements, |
| furniture, fixtures, equipment, and inventory on a special form | |
| basis. This coverage must also include (i) flood and earthquake | |
| coverage in geographically prone | |
| zones, (ii) business income | |
| and extra expense coverage for 12 months for actual losses | |
| sustained or at least 50% of your annual revenue, (iii) rent and | |
| royalties due to us, and (iv) extended business income coverage | |
| for 180 days. |
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees must maintain commercial property insurance. This insurance must cover the full replacement cost value of all leasehold improvements, furniture, fixtures, equipment, and inventory on a special form basis.
In geographically prone zones, the commercial property insurance must also include flood and earthquake coverage. Additionally, it must include business income and extra expense coverage for 12 months, covering either actual losses sustained or at least 50% of the franchisee's annual revenue.
The insurance policy must also cover rent and royalties due to Cream. Finally, the commercial property insurance must include extended business income coverage for 180 days.