Am I required to reimburse Cream for direct costs incurred during the transfer of my Agreement to a wholly-owned entity?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not originally sign this Agreement as an Entity, you may transfer this Agreement to an Entity; provided, that: (1) such Entity conducts no business other than your Shop and, if applicable, other Jeni's Ice Creams Scoop Shops; (2) you maintain management control of such Entity; (3) you own and control 100% of the economic interests, equity, and voting power of all issued and outstanding ownership interests in such Entity; (4) all of the assets of your Shop are owned, and the business of your Shop is conducted only by, that single Entity; (5) you satisfy all conditions applicable to a transfer described in Section 12.C, except that we will not require payment of a transfer fee as described in Section 12.C(10) (provided, that you reimburse us for any costs we incur in connection with documenting and otherwise processing such transfer, including reasonable legal fees) and our right of first refusal under Section 12.F will not apply; and (6) that Entity must expressly assume all of your obligations under this Agreement, your Lease, and otherwise satisfy the conditions under this Agreement, including delivery of insurance certificates to us.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if you transfer your Agreement to a wholly-owned entity, you are generally required to reimburse Cream for direct costs. Specifically, if you did not originally sign the agreement as an entity, and you later transfer the agreement to an entity that you own and control, you will not be required to pay a transfer fee.
However, this fee waiver is conditional. You must reimburse Cream for any direct costs they incur while documenting and processing the transfer. These reimbursable costs specifically include reasonable legal fees.
In summary, while Cream waives the standard $25,000 transfer fee for transfers to a wholly-owned entity, you, as the franchisee, are still responsible for covering Cream's direct costs associated with the transfer, including legal fees.