Can the Cream Brand Fund spend more or less than the total contributions in a fiscal year?
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.
We may, upon prior written notice to you, reduce or suspend Brand Fund Contributions and/or operations of the Brand Fund for one or more periods of any length and terminate (and, if terminated, reinstate) the Brand Fund and associated Brand Fund Contributions. If we terminate the Brand Fund, we will spend the remaining balance of the monies in the Brand Fund in accordance with this Section until such amounts are exhausted. We may elect to maintain multiple Brand Funds, whether determined by geographic region, country, or otherwise, or consolidate or merge multiple Brand Funds, in each case provided that each such Brand Fund will otherwise remain subject to this Section.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Brand Fund can indeed spend more or less than the total contributions received during a fiscal year. This means that Cream has the flexibility to manage the Brand Fund's finances to align with its strategic marketing objectives. Cream can borrow funds or utilize surplus funds from previous years.
For a prospective Cream franchisee, this has several implications. On one hand, it demonstrates that Cream is proactive in managing the Brand Fund and is not strictly limited by the contributions received in a given year. This could allow for more significant or timely marketing initiatives that benefit the entire franchise system. On the other hand, it also means that there is no guarantee that the Brand Fund will be spent proportionally to a franchisee's contributions or that individual shops will directly benefit from the expenditures.
Cream franchisees should be aware that Cream has no fiduciary duty in administering the Brand Fund. Cream has the right to use collection agents and institute legal proceedings to collect Brand Fund Contributions at the Brand Fund's expense. Cream can also forgive, waive, settle, and compromise all claims by or against the Brand Fund in its sole discretion. Cream can also reduce or suspend Brand Fund Contributions and/or operations of the Brand Fund for one or more periods of any length and terminate (and, if terminated, reinstate) the Brand Fund and associated Brand Fund Contributions.