How may Cream collect amounts owed to them during interim operations of my Cream Shop?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
During any time period that we elect to operate your Shop on any interim basis, we will collect the Net Sales of your Shop in an account we designate, which may be your business account and/or the business account of us or one of our affiliates or designees. We will account for and deduct from such Net Sales all operating expenses of your Shop, including: (i) any applicable Royalty, Brand Fund Contributions, and other amounts due to us or our affiliates, and (ii) any and all of our and our affiliates' and our designees' costs and expenses arising from such interim operations, which you hereby agree that you will reimburse in full as an operating expense of your Shop. Any and all Net Sales that exceed the expenses of your Shop during the period of interim operations, as we determine and calculate, will be retained by us in full and will become our property, as consideration for the interim operations that we are providing under this Section 14.D. If the Net Sales derived from operation of your Shop are less than the amount of the associated expenses during the time of any interim operations, you are solely directly responsible for the balance of all such expenses and costs, including reimbursement of our and our affiliates' and designee's costs and expenses, and payment of any Royalty, Brand Fund Contributions, and other amounts due to us or our affiliates. We may collect any amounts owed to us, our affiliates, or designees directly from any collected Net Sales, and/or pay over such amounts to us, our affiliates, or designees in any manner we see fit.
Our decision to operate your Shop on an interim basis will not affect our right to terminate this Agreement under Section 14. Your indemnification obligations set forth under Section 16.D will continue to apply during any period that we or our designee operate your Shop on an interim basis.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, during any period that Cream operates your shop on an interim basis, they will collect the Net Sales in an account they designate, which may be your business account, their business account, or the account of one of their affiliates or designees. Cream will deduct all operating expenses from these Net Sales. These expenses include any applicable Royalty, Brand Fund Contributions, and other amounts due to Cream or its affiliates, as well as any costs and expenses arising from the interim operations. You, as the franchisee, agree to reimburse these costs in full as an operating expense of your shop.
If the Net Sales exceed the expenses during the interim operations, Cream will retain the excess as consideration for providing the interim operations. However, if the Net Sales are less than the expenses, you are directly responsible for the balance of all expenses and costs, including reimbursement of Cream's costs and expenses, and payment of any Royalty, Brand Fund Contributions, and other amounts due. Cream may collect any amounts owed to them, their affiliates, or designees directly from the collected Net Sales, and/or pay over such amounts to them in any manner they see fit.
This means that as a Cream franchisee, you bear the financial risk during interim operations. If your shop performs well, Cream keeps the profits. If it performs poorly, you must cover the losses. Cream has broad discretion in how they manage the funds and collect any outstanding debts during this period. It is important to note that Cream's decision to operate your shop on an interim basis does not affect their right to terminate the Franchise Agreement, and your indemnification obligations continue to apply.