What are the insurance-related fees if Cream obtains 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 coverage specified by Cream, Cream has the right to obtain insurance on behalf of the franchisee's shop. In this case, the franchisee is responsible for paying Cream 120% of the insurance premiums paid by Cream. This fee is due as incurred.
This means that Cream adds a 20% surcharge on top of the actual insurance premium cost. This could significantly increase a franchisee's expenses if they do not maintain their own insurance coverage. Franchisees should ensure they understand Cream's insurance requirements and maintain adequate coverage to avoid this additional fee.
It is common practice in franchising for franchisors to require franchisees to maintain specific insurance coverage to protect the brand and the business. It is also not unusual for franchisors to offer to obtain insurance on behalf of franchisees who fail to do so, but the fees associated with this service can vary. Franchisees should carefully review the insurance requirements and any associated fees to make informed decisions about their insurance coverage.