Must Cream franchisees include a waiver of subrogation rights against Cream in their insurance policies?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Each insurance policy must contain a waiver of all subrogation rights against us and any of our affiliates or other designees that we specify. You must routinely furnish to us copies of your Certificates of Insurance or other evidence of your maintaining this insurance coverage and paying premiums. If you fail or refuse to obtain and maintain the insurance we specify, in addition to our other remedies including termination, we may (but are not required to) obtain such insurance for you and your Shop on your behalf, in which event you agree to cooperate with us and reimburse us on demand for 120% of the costs of all premiums.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees are required to include a waiver of subrogation rights against Cream and any of its affiliates or other designees that Cream specifies in their insurance policies. This requirement is part of the insurance obligations that franchisees must fulfill during the term of the franchise agreement.
This waiver means that the franchisee's insurance company will not be able to pursue Cream to recover any payments made to the franchisee for claims, even if Cream is at fault. This protects Cream from potential liability and ensures that Cream's insurance is not used to cover losses that should be covered by the franchisee's insurance.
Cream also has the right to require franchisees to obtain insurance policies from a designated supplier and on terms that Cream approves. Franchisees must provide Cream with copies of their Certificates of Insurance or other evidence of maintaining the required insurance coverage and paying premiums. If a franchisee fails to maintain the specified insurance, Cream has the option to obtain the insurance on the franchisee's behalf and charge the franchisee 120% of the premium costs.