Who has the right to defend any claim against an Indemnified Party under the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Indemnified Party may defend any claim against it at your expense and agree to settlements or take any other remedial, corrective, or other actions. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its losses and expenses, in order to maintain and recover fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this Section. Any Indemnified Party may demand that you advance funds to such Indemnified Party to pay for any claims that are indemnifiable under this Section, and you will advance such funds promptly upon demand; provided, however, that if (and only to the limited extent that) any such claim is ultimately determined not to be indemnifiable under this Section in a final, unappealable ruling issued by a court with competent jurisdiction or arbitrator, such Indemnified Party must reimburse any portion of such funds that are attributable to such non-indemnifiable claims.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, any Indemnified Party has the right to defend any claim against it. The Indemnified Parties include Cream, its affiliates, and their respective owners, directors, managers, officers, employees, agents, successors, and assignees.
This means that if a claim is made against Cream or any of its related parties, those parties have the right to manage the defense of that claim. This includes the ability to agree to settlements or take other remedial actions. The franchisee is responsible for covering the expenses incurred by the Indemnified Party in defending the claim.
This indemnification extends beyond the term of the franchise agreement. Cream is not obligated to seek recovery from any insurer or mitigate losses before making a claim against the franchisee. Furthermore, Cream can demand that the franchisee advance funds to cover claims that are subject to indemnification. If a claim is ultimately determined to not be indemnifiable, Cream is obligated to reimburse the franchisee for the funds advanced related to that specific non-indemnifiable claim.