Does Cream's acceptance of payments after a breach of the Franchise Agreement waive the breach?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you will not waive or impair any right, power, or option this Agreement reserves (including our right to demand exact compliance with every term, condition, and covenant or to declare any breach to be a default and to terminate this Agreement before the Term expires) because of any custom or practice at variance with this Agreement's terms; our or your failure, refusal, or neglect to exercise any right under this Agreement or to insist upon the other's compliance with this Agreement, including any System Standard; our waiver of or failure to exercise any right, power, or option, whether of the same, similar, or different nature, with other Jeni's Ice Creams Scoop Shops; the existence of franchise agreements for other Jeni's Ice Creams Scoop Shops which contain provisions different from those contained in this Agreement; or our acceptance of any payments due from you after any breach of this Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement, or accord and satisfaction. We are authorized to remove any legend or endorsement, which then will have no effect.
The following provision applies if you or the franchise granted hereby are subject to the franchise registration laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin: No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (1) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (2) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream's acceptance of payments from a franchisee after a breach of the Franchise Agreement does not constitute a waiver of the breach. Cream retains all rights and options under the agreement, including the right to demand full compliance with all terms or to declare a default and terminate the agreement, even if payments are accepted after a breach. This protects Cream's ability to enforce the franchise agreement fully, regardless of whether they continue to accept payments.
This provision is designed to protect Cream's interests by ensuring that they do not inadvertently waive their rights due to accepting payments. It means that even if a franchisee is in breach of the agreement, Cream can still accept payments without losing the right to take action on the breach at a later time. This is particularly important in franchise relationships where ongoing payments are critical to the franchisor's revenue stream. The franchisee should be aware that continued payments do not guarantee that the breach is forgiven.
Furthermore, any special or restrictive legends or endorsements on checks or similar items provided to Cream will not act as a waiver, compromise, settlement, or accord and satisfaction. Cream is authorized to remove any such legend or endorsement, rendering it ineffective. This clause prevents franchisees from attempting to use payment checks to negotiate or resolve disputes unilaterally.
However, there is an exception for franchisees subject to franchise registration laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin. In these states, no statement, questionnaire, or acknowledgment signed by the franchisee at the start of the franchise can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Cream or its representatives. This provision supersedes any other conflicting terms in the franchise agreement, providing additional protection to franchisees in those specific states.