Who are considered the 'Indemnified Parties' that a Cream franchisee must indemnify?
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 Cream's 2025 Franchise Disclosure Document, the franchisee is required to indemnify specific parties, referred to as the 'Indemnified Parties.' These parties include Cream itself, its affiliates, and the respective affiliates, owners, directors, managers, officers, employees, agents, successors, and assignees of both Cream and its affiliates.
This means that a Cream franchisee is financially responsible for protecting these Indemnified Parties from claims, obligations, and damages that arise directly or indirectly from the franchisee's development rights, the operation of their Cream business, any breaches of the franchise agreement, or the actions or omissions of the franchisee, their owners, or their representatives. This indemnification extends to covering costs incurred in defending against any claims, including accounting, arbitration, legal, and expert witness fees, as well as investigation costs and litigation expenses.
However, the franchisee is not responsible for indemnifying the specified parties if the claims, obligations, or damages are determined to be caused solely by the intentional misconduct of the Indemnified Party. This exception provides a limit to the franchisee's responsibility, ensuring they are not liable for damages resulting from the intentional wrongdoing of Cream or its associated parties. It is important for prospective franchisees to understand the scope of this indemnification and the potential financial implications, as it could involve significant costs depending on the nature and extent of any claims that arise.