When is the insurance reimbursement to Cream due if Cream obtains insurance for the franchisee?
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 required insurance, Cream has the right to obtain insurance on behalf of the franchisee's shop. In this case, the franchisee is required to reimburse Cream 120% of the premiums paid. This reimbursement is due to Cream 'as incurred'.
The term 'as incurred' generally means that the payment is due when the cost is actually charged or experienced by Cream. In practical terms, this means that Cream will likely invoice the franchisee for the insurance costs shortly after Cream pays the insurance premiums. The franchisee will then be responsible for paying that invoice promptly.
It is important for prospective Cream franchisees to maintain the required insurance coverage to avoid Cream securing insurance on their behalf, which would result in an additional 20% charge on top of the premium cost. Franchisees should clarify with Cream the exact payment terms and acceptable methods of payment for such insurance reimbursements to ensure timely payments and avoid any late payment penalties or disruptions to their franchise operations.