Who are considered the 'Indemnified Parties' that Cream franchisees 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 Indemnified Parties that a franchisee agrees to indemnify, defend, and hold harmless include Cream, its affiliates, and their respective affiliates, owners, directors, managers, officers, employees, agents, successors, and assignees. This means that the franchisee is responsible for protecting these individuals and entities from claims, obligations, and damages arising from the franchisee's business operations.
The franchisee's indemnification extends to claims, obligations, and damages that directly or indirectly arise from several sources. These include the development and operation of the Cream shop, the business conducted under the Franchise Agreement, any breach of the Franchise Agreement by the franchisee, the franchisee's employment practices, and the actions or omissions of the franchisee, their owners, or their representatives. This broad scope of indemnification places a significant responsibility on the franchisee to manage their business in a way that minimizes risk and potential liability for the Indemnified Parties.
However, there is an exception to this indemnification. The franchisee is not responsible for claims, obligations, or damages that are determined to be caused solely by the Indemnified Party's intentional misconduct. This determination must be made in a final, unappealable ruling by a court with competent jurisdiction or an arbitrator. This exception provides some protection to the franchisee in cases where the Indemnified Party's own actions are the primary cause of the issue. Furthermore, any Indemnified Party can defend a claim at the franchisee's expense and decide on settlements or other corrective actions. This indemnity remains effective even after the Franchise Agreement expires or terminates.