What is the process for determining whether a claim is indemnifiable under the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
D. INDEMNIFICATION.
You agree to indemnify, defend, and hold harmless us, our affiliates, and each of our and their respective affiliates, owners, directors, managers, officers, employees, agents, successors, and assignees (the "Indemnified Parties") against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of: (i) the development and operation of your Shop; (ii) the business you conduct under this Agreement; (iii) your breach of this Agreement; (iv) your employment practices, instituted by your employees or by others; and/or (v) the actions or omissions of you, your owners, or your and their respective representatives, unless (and then only to the extent that) the claims, obligations, or damages are determined to be caused solely by the Indemnified Party's intentional misconduct in a final, unappealable ruling issued by a court with competent jurisdiction or arbitrator. For purposes of this indemnification, "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, regardless of whether litigation or alternative dispute resolution is commenced.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the franchisee agrees to indemnify, defend, and hold harmless Cream, its affiliates, and their respective personnel against claims, obligations, and damages. These claims must directly or indirectly arise from the franchisee's shop development and operation, business conduct under the agreement, breach of the agreement, employment practices, or actions and omissions of the franchisee and their representatives.
However, the franchisee is only responsible for indemnification unless the claims, obligations, or damages are determined to be caused solely by Cream's intentional misconduct. This determination must be made in a final, unappealable ruling by a court with competent jurisdiction or an arbitrator.
For indemnification purposes, "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that Cream reasonably incurs in defending any claim. This includes fees for accountants, arbitrators, attorneys, and expert witnesses, as well as costs of investigation, proof of facts, court costs, travel and living expenses, and other litigation or alternative dispute resolution expenses, regardless of whether litigation or alternative dispute resolution is commenced.