When is the insurance fee due to Cream if they obtain insurance on my behalf?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
M 6 OTHER FEES**
| Type of Fee | Amount | Due Date | Remarks 1, 2 |
|---|---|---|---|
| Interest on Late Payment | Lesser of 1.5% per month or the highest commercial contract rate allowed by law | As incurred | All amounts which you owe us for any reason wi |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee fails to obtain and maintain the insurance Cream specifies, Cream has the right to obtain insurance on behalf of the franchisee's shop. If Cream obtains insurance on the franchisee's behalf, the insurance fee, which is 120% of the premiums paid, is due 'as incurred.'
In practical terms, this means that Cream will charge the franchisee 120% of the cost of the insurance premiums they pay, and this payment is due at the time Cream incurs the expense. The 'as incurred' due date indicates that Cream expects prompt reimbursement for the insurance coverage they secure for the franchisee. This is in addition to the cost of the premiums themselves, Cream tacks on an extra 20%.
This policy incentivizes franchisees to maintain their own insurance coverage as required by Cream, as failing to do so results in a higher cost (120% of the premium) and immediate payment obligations. Franchisees should ensure they understand Cream's insurance requirements and maintain adequate coverage to avoid these additional fees and potential disruptions to their business operations. Cream could potentially terminate the franchise agreement if the franchisee does not maintain insurance.