What is the minimum employer liability limit required for Cream's workers' compensation insurance?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Policy/Coverage Type | Minimum Limits | |
|---|---|---|
| Commercial Property Insurance | Full replacement cost value of all leasehold improvements, | |
| furniture, fixtures, equipment, and inventory on a special form | ||
| basis. This coverage must also include (i) flood and earthquake | ||
| coverage in geographically prone zones, (ii) business income | ||
| and extra expense coverage for 12 months for actual losses | ||
| sustained or at least 50% of your annual revenue, (iii) rent and | ||
| royalties due to us, and (iv) extended business income coverage | ||
| for 180 days. | ||
| Commercial General Liability | $1,000,000 per occurrence and $2,000,000 in the aggregate, | |
| including bodily injury and property damage; $2,000,000 | ||
| products liability, personal and advertising liability, and products | ||
| and completed operations coverage. | ||
| Auto Liability | $1,000,000 combined single limit for all owned, hired, and non- | |
| owned automobiles used in connection with your Shop(s). |
Purchase Arrangements, Material Benefits, and Revenue
We may from time to time negotiate purchase arrangements with suppliers of products and services to franchisees, including price terms, though we have not currently done so. We have not established purchasing or distribution cooperatives. We do not currently provide material benefits to franchisees for purchasing particular products or services or for using particular approved suppliers.
We and/or our affiliates may derive revenue in the form of rebates, vendor promotions, or other consideration from suppliers based on your purchases and leases of certain products and services, though currently neither we nor our affiliates do so. We did not derive any revenue from vendors on the basis of purchases by franchisees in our last fiscal year.
As of the issuance date of this Disclosure Document, none of our officers own any interest in any of the approved suppliers other than our Parent.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the Franchise Agreement and Area Development Agreement. It will help you find more detailed information about your obligations in these agreements and in other items of this Disclosure Document.
| Workers’ Compensation | Statutory minimum coverage amounts, with employer liability minimum limit of $1,000,000. |
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 24–27)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees are required to maintain statutory minimum coverage amounts for workers' compensation insurance. This insurance must include an employer liability minimum limit of $1,000,000.
This means that a Cream franchisee must secure a workers' compensation insurance policy that meets the state's legally mandated minimums for coverage, and also includes at least $1,000,000 in employer liability coverage. Employer liability insurance protects the franchisee's business against lawsuits from employees who are injured on the job but whose injuries are not fully covered by workers' compensation.
It is important for prospective Cream franchisees to factor in the cost of this insurance when evaluating the overall investment and operating expenses of the franchise. Franchisees should consult with qualified insurance brokers to obtain appropriate coverage that satisfies Cream's requirements and adequately protects their business from potential liabilities.