Can Cream administer the Brand Fund through a separate entity?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We will account for the Brand Fund separately from our other funds. However, neither we nor any of our affiliates has any fiduciary obligation to you or any other person for administering the Brand Fund. The Brand Fund may spend in any fiscal year more or less than the total Brand Fund Contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We may administer the Brand Fund through a separate entity whenever we deem appropriate, and such entity will have all of the rights and duties specified herein. We have the right, but no obligation, to use collection agents and institute legal proceedings to collect Brand Fund Contributions at the Brand Fund's expense. We may also forgive, waive, settle, and compromise all claims by or against the Brand Fund in our sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream has the authority to administer the Brand Fund through a separate entity if they deem it appropriate. This separate entity would then assume all the rights and responsibilities related to the Brand Fund as specified in the franchise agreement.
This provision provides Cream with flexibility in managing the Brand Fund. By using a separate entity, Cream could potentially streamline administrative processes, enhance financial transparency, or achieve other strategic objectives related to the Brand Fund's operations. However, the FDD does not elaborate on the specific reasons why Cream might choose to administer the Brand Fund through a separate entity.
For a prospective franchisee, this means that the Brand Fund could be managed by Cream directly or by an external organization under Cream's direction. While the franchisee contributes to the Brand Fund, the actual management could be handled by a third party. It is important to note that Cream retains the right to make this decision and that the separate entity would be bound by the same terms and conditions outlined in the franchise agreement.
Prospective franchisees might want to inquire with Cream about the circumstances under which they would choose to administer the Brand Fund through a separate entity, the potential benefits of such an arrangement, and how it might impact franchisees. Understanding Cream's intentions and the structure of the separate entity can help franchisees assess the overall management and transparency of the Brand Fund.