Who must Cream franchisees name as additional insureds on their liability coverage policies?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Each insurance policy for liability coverage must name us and any of our affiliates or other designees that we specify as additional named insureds, using a form of endorsement that we have approved, and provide for 30 days' prior written notice to us of a policy's material modification, cancellation, or expiration. 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 must name Cream and any of its affiliates or other designees that Cream specifies as additional named insureds on their liability coverage policies. This requirement is intended to protect Cream from potential liabilities arising from the operation of the franchise.
Cream requires this to ensure that they are protected from claims related to bodily injury, death, or property damage that may occur at the franchise location or due to the franchisee's operations. By being named as an additional insured, Cream can directly access the franchisee's insurance coverage in the event of a claim, which can help to mitigate their own potential financial losses.
Cream also requires that each insurance policy contain a waiver of all subrogation rights against them and any of their affiliates or other designees. This prevents the insurance company from pursuing Cream to recover any payments made on a claim. Franchisees must also furnish copies of their Certificates of Insurance to Cream as evidence of maintaining the required coverage and paying premiums. Failure to maintain the specified insurance can result in Cream obtaining insurance on behalf of the franchisee, with the franchisee required to reimburse Cream for 120% of the premium costs.