What business activities are permitted for an entity to which I transfer my Cream 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 did not initially sign the agreement as an entity, you are permitted to transfer the agreement to an entity under specific conditions. The entity's business activities must be limited to operating your Cream shop and, if applicable, other Jeni's Ice Creams Scoop Shops. This means the entity cannot engage in any other business ventures outside of operating Cream franchises.
Furthermore, you must maintain management control of the entity and own 100% of its economic interests, equity, and voting power. All assets of your Cream shop must be owned, and the business conducted solely by this single entity. The entity must also assume all obligations under the Franchise Agreement and the lease, including providing insurance certificates.
As the original franchisee, you will remain personally liable under the agreement, even after the transfer to the entity. This includes signing a personal guaranty. Additionally, you must sign a consent to assignment and assignment form that may include a release of claims against Cream and its affiliates.
In summary, Cream permits the transfer of the Franchise Agreement to a wholly-owned entity, but strictly limits the entity's business activities to the operation of Cream shops, while also ensuring the original franchisee retains control and remains liable for the franchise's obligations.