What is the condition regarding post-termination obligations for the Cream franchisee and transferring owners upon transfer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) you (and your owners) and the transferee (and its owners) sign all of the documents we are then requiring in connection with a transfer, in a form satisfactory to us, including: (i) a release of any and all claims (except for claims which cannot be released or waived pursuant to applicable law) against us and our affiliates and our and their owners, officers, directors, employees, and agents, and (ii) covenants that you and your transferring owners agree to satisfy all post-termination obligations under this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, as a condition of transfer, both the franchisee and their transferring owners must agree to satisfy all post-termination obligations under the Franchise Agreement. This requirement ensures that certain responsibilities and duties continue even after the franchise changes ownership.
These post-termination obligations can include various aspects, such as non-competition agreements, confidentiality clauses, and other stipulations designed to protect Cream's brand and business interests. The non-compete agreement lasts for two years after termination or expiration of the agreement. During this time, the franchisee and their owners must not have any direct or indirect interest in a Competitive Business within the Development Area or within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop. These obligations also extend to the franchisee's spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns.
This condition is in place to maintain the integrity of the Cream franchise system and prevent any potential conflicts of interest or misuse of confidential information after a transfer. By agreeing to these terms, the franchisee and transferring owners acknowledge their ongoing responsibilities to Cream, even after they are no longer directly involved in the business. Prospective franchisees should carefully review the specific post-termination obligations outlined in the Franchise Agreement to fully understand their scope and duration.