According to the Cream franchise agreement, what rights are granted to the developer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
l as other beverages, products, accessories, and merchandise authorized by us from time to time (each a "Jeni's Ice Creams Scoop Shop"). Jeni's Ice Creams Scoop Shops are developed and operated using certain specified and distinct business formats, methods, procedures, designs, layouts, standards, and specifications, all of which may be improved, further developed, or otherwise modified from time to time (the "System").
B. GRANT AND TERM OF DEVELOPMENT RIGHTS.
Subject to the terms of this Agreement, we hereby grant you the right to develop, own, and operate the number of Jeni's Ice Creams Scoop Shops specified in your Development Schedule (defined in Section 2.B) (your "Development Rights") strictly within the geographic area specified on Attachment A (your "Development Area"). You accept the grant of the Development Rights and agree to faithfully, honestly, and diligently perform your obligations under this Agreement and fully exploit the Development Rights during the Term (defined below) and throughout the entire Development Area. The term of this Agreement (the "Term") will begin on the Effective Date and, unless sooner terminated as provided herein, will expire on the earlier of (1) the date on which the last Jeni's Ice Creams Scoop Shops required to be opened in order to satisfy the Development Schedule opens for regular business, or (2) the last day of the last Development Period (defined below) of the Development Schedule. You may not extend the Term of this Agreement without our approval, which we will grant in our sole discretion.
C. IF YOU ARE AN ENTITY.
If you are a corporation, limited liability company, or partnership (each, an "Entity"), you represent that you have, and will have throughout the Term, the authority to execute, deliver, and perform your obligations under this Agreement and all related agreements and are duly organized or formed. You agree to remain validly existing and in good standing under the laws of the state of your formation throughout the Term. You agree to maintain organizational documents, including your operating agreement or partnership agreement, as applicable, that reflect the restrictions on issuance and transfer of any ownership interests in you described in this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to this Agreement's restrictions.
You agree and represent that Attachment C to this Agreement completely and accurately describes all of your owners and their interests in you as of the Effective Date. Each of your owners with a 10% or greater ownership interest in your Entity must execute a guarantee in the form we prescribe undertaking personally to be bound, jointly and severally, by all provisions of this Agreement
and any ancillary agreements between you and us. Our current form of guarantee is attached herein as Attachment D. Subject to our rights and your obligations under Section 7, you and your owners agree to sign and deliver to us revised Attachment C to reflect any permitted changes in the information that Attachment C now contains.
You must identify on Attachment C one of your owners who is a natural person and who will have authority and signatory power on behalf of you (the "Principal Owner"). You must obtain our written consent prior to changing the Principal Owner and agree to deliver to us a revised Attachment C to accurately identify the Principal Owner should the identity of that person change during the Term as permitted hereunder. You agree that the Principal Owner is authorized, on your behalf, to deal with us in respect of all matters whatsoever which may arise in respect of this Agreement. Any decision made by the Principal Owner will be final and binding upon you, and we will be entitled to rely solely upon the decision of the Principal Owner in any such dealings without the necessity of any discussions with any other person, and we will not be held liable for any actions taken by you or otherwise, based upon any decision or actions of the Principal Owner. You represent and agree that the person acting as your Principal Owner has full power and authority to enter into this Agreement and any other documents to which you are a party, and to make binding decisions on your behalf.
D. DEVELOPMENT AREA AND RESERVATION OF RIGHTS.
The Development Rights may only be exercised for Jeni's Ice Creams Scoop Shops to be located in the Development Area. As long as you are in compliance with this Agreement and all Franchise Agreements (defined below) signed pursuant to this Agreement, and except as set forth in this Section 1.D, we will not, during the Term, operate or grant the right to anyone else to operate a Jeni's Ice Creams Scoop Shops within the Development Area, or grant Development Rights to anyone else to be exercised with your Development Area.
For the avoidance of doubt, we reserve for ourselves and our affiliates all rights not expressly granted to you in this Agreement and the right to do all things that we do not expressly agree in this Agreement not to do, in each case, without compensation to you, without regard to proximity to your Development Area, and on such terms and conditions as we deem appropriate.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream grants the developer the right to develop, own, and operate the number of Jeni's Ice Creams Scoop Shops specified in the Development Schedule within the Development Area, as detailed in Attachment A. The developer must adhere to the terms of the agreement and diligently perform their obligations to fully exploit these Development Rights during the Term. The term of the agreement begins on the Effective Date and expires when the last shop required by the Development Schedule opens or on the last day of the Development Period. Any extension of the Term requires Cream's approval.
Cream will not operate or grant others the right to operate Jeni's Ice Creams Scoop Shops within the Development Area, nor grant Development Rights to others within that area, as long as the developer complies with the agreement and all related Franchise Agreements. However, Cream retains all rights not expressly granted to the developer, including the right to operate or allow others to operate Jeni's Ice Creams Scoop Shops outside the Development Area. Cream also reserves the right to establish other types of businesses, even those that compete with Jeni's Ice Creams Scoop Shops, under different trade names, anywhere in the world, including within the Development Area.
Before developing a Jeni's Ice Creams Scoop Shop, the developer must obtain Cream's approval for the proposed site and provide all requested information to assess the site and the developer's ability to operate it. Cream has the right to disapprove any proposed development if it does not meet their criteria or if the developer is not in compliance with the agreement. To have a shop count toward the Development Schedule, the developer must secure site approval, execute the current Franchise Agreement, pay all associated fees, acquire occupancy rights, and secure approval to open the shop in full compliance with the Franchise Agreement.
In practical terms, while Cream grants developers exclusive rights to the Cream brand within a specific area, Cream retains considerable control over site selection and business operations. Cream also protects its ability to pursue other business ventures, even if they compete. A prospective developer should carefully consider these limitations and obligations, especially the financial commitments and development schedule, before entering into an agreement with Cream.