Besides owning 100% of the entity, what management control must I maintain after transferring my Cream Franchise Agreement?
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. You agree to remain personally liable under this Agreement as if the transfer to the Entity did not occur, including by signing our then-current form of personal guaranty of the obligations of such Entity. You must also sign the form of consent to assignment and assignment satisfactory to us which may include a release of any and all claims (except for claims which cannot be released or waived pursuant to an applicable franchise statute) against us and our affiliates, and our and their owners, officers, directors, employees, and agents.
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 Franchise Agreement to a wholly-owned entity, you must maintain management control of that entity. Additionally, the entity must conduct no business other than your Cream shop and, if applicable, other Jeni's Ice Creams Scoop Shops. You must also own and control 100% of the economic interests, equity, and voting power of all issued and outstanding ownership interests in the entity.
This means that while you can transfer the agreement to an entity you fully own, you cannot relinquish control over the business's operations. You must remain actively involved in managing the Cream shop. This requirement ensures that the franchise is still operated according to Cream's standards and that the franchisee remains committed to the business.
Furthermore, all assets of your shop must be owned, and the business of your shop must be conducted only by that single entity. This prevents the commingling of assets or business activities with other ventures. By maintaining management control, owning 100% of the entity, and ensuring the entity's sole focus is on the Cream shop, Cream aims to preserve the integrity and consistency of its brand and operations across all franchise locations.