What is the minimum rating required for insurance companies from which Cream franchisees purchase insurance?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
These insurance policies must be purchased from licensed insurers having a rating of "A/VIII" or higher by the then-current edition of Best Insurance Reports published by A.M. Best Company (or other similar publication or criteria we designate).
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 secure insurance policies from licensed insurers with a minimum rating of "A/VIII". This rating must be from the then-current edition of Best Insurance Reports published by A.M. Best Company, or an equivalent publication or criteria designated by Cream.
This requirement ensures that Cream franchisees obtain insurance coverage from reputable and financially stable providers. The "A/VIII" rating indicates that the insurance company has a strong ability to meet its ongoing obligations to policyholders. By setting this standard, Cream aims to minimize the risk of franchisees being insured by companies that may be unable to pay out claims.
Cream also retains the right to demand that franchisees acquire insurance from a specific supplier, adhering to terms and specifications approved by Cream. Furthermore, Cream can periodically adjust the required coverage amounts or mandate additional insurance types. Franchisees must include Cream and its affiliates as additional named insureds on liability policies and provide 30 days' written notice for any policy modifications or cancellations. Franchisees must also provide copies of insurance certificates to Cream as proof of coverage and premium payments. Failure to maintain the specified insurance allows Cream to obtain the necessary coverage on behalf of the franchisee, with the franchisee responsible for reimbursing Cream for 120% of the premium costs.