What must certificates representing ownership interests in the Cream franchisee entity bear?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a corporation, limited liability company, or partnership (each, an "Entity"), you represent that you have the authority to execute, deliver, and perform your obligations under this Agreement and all related agreements and are duly organized or formed. You agree to remain validly existing and in good standing under the laws of the state of your formation throughout the Term. You agree to maintain organizational documents, including your operating agreement or partnership agreement, as applicable, that reflect the restrictions on issuance and transfer of any ownership interests
in you described in this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to this Agreement's restrictions.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a Cream franchisee is a corporation, limited liability company, or partnership, the organizational documents must reflect restrictions on the issuance and transfer of ownership interests as described in the franchise agreement. Furthermore, all certificates and other documents representing ownership interests in the franchisee entity must bear a legend referring to the restrictions outlined in the Cream franchise agreement.
This requirement ensures that any potential transfer of ownership is subject to the franchisor's approval and adheres to the conditions specified in the franchise agreement. This protects Cream by maintaining control over who becomes a franchisee and ensuring that new owners are aware of and bound by the existing franchise terms.
For a prospective Cream franchisee, this means that if they choose to operate under a business entity, they must ensure that all ownership documents clearly indicate the restrictions on transfer and issuance as detailed in the franchise agreement. Failure to comply with this requirement could potentially lead to a breach of the franchise agreement and possible termination of the franchise.