Does the Cream Area Development Agreement specify that the non-compete radius is subject to state law?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
AGREED* and executed and delivered under seal by the parties hereto as of the day and year
of the Lease.
ATTACHMENT F TO FRANCHISE AGREEMENT
STATE-SPECIFIC RIDERS
The state-specific terms below will apply to this Agreement and modify the terms to this Agreement, if the transaction satisfies the jurisdictional requirements described below for any particular state law and is not otherwise exempt from such law. The provisions of multiple states may apply.
The following provision applies if you or the franchise granted hereby are subject to the franchise 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 (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) 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.
ILLINOIS
The following provisions are annexed to and form part of this Agreement if and only if, and in such case to the extent that: (a) you are domiciled in the State of Illinois or (b) the offer of the franchise is made or accepted in the State of Illinois and your franchised business is or will be operated in the State of Illinois.
- The following language is added to the end of the Agreement:
Except for the U.S. Federal Arbitration Act and other federal laws in the U.S., the laws of the State of Illinois will govern this Agreement.
Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
Section 41 of the Illinois Franchise Disclosure Act provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
Your rights upon termination and non-renewal of a franchise agreement are subject to sections 19 and 20 of the Illinois Franchise Disclosure Act.
MARYLAND
The following provisions are annexed to and form part of this Agreement if and only if, and in such case to the extent that: (a) you are a resident of the State of Maryland; or (b) your franchised business is or will be operated in the State of Maryland; or (c) the offer of the franchise was made or accepted in the State of Maryland.
- The following is added to the end of Sections 12.C(4), 12.E, 13.A(8), and 15.D of the Agreement:
Pursuant to COMAR 02.02.08.16L, any release required as a condition of renewal and/or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
- The following is added to the end of Section 14.A of the Agreement:
This provision might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.).
- Section 17.F of the Agreement is supplemented by adding the following to the end of the Section:
A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Registration and Disclosure Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
- Section 17.H of the Agreement is supplemented by adding the following to the end of the Section.
A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure law.
- The following is added to the end of Section 17.L of the Agreement:
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
6.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to the 2025 FDD, the Cream Area Development Agreement includes state-specific riders that modify the agreement's terms based on the franchisee's location. For instance, if the franchisee's business operates in Illinois, the laws of Illinois will govern the agreement, except for the U.S. Federal Arbitration Act and other federal laws. Additionally, any provision designating jurisdiction or venue outside of Illinois is void, although arbitration outside of Illinois is permitted.
Minnesota law requires Cream to provide 90 days' notice of termination (with 60 days to cure) except in certain specified cases. Releases required for renewal or assignment/transfer will not apply if prohibited by the Minnesota Franchises Law. Franchisees in Minnesota also cannot be required to waive their rights to a jury trial or to waive their rights to any procedure, forum, or remedies provided by the laws of the jurisdiction, or to consent to liquidated damages, termination penalties, or judgment notes.
For franchisees operating in Maryland, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise. These state-specific provisions indicate that certain aspects of the Area Development Agreement, including those related to termination, releases, and legal rights, are subject to and modified by the franchise laws of specific states like Illinois, Minnesota, and Maryland.