What is the consequence of transferring a Cream Shop without Cream's approval?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The rights and duties this Agreement creates are personal to you (and if you are conducting business as an Entity, each of your owners), and we have granted you the terms of this Agreement in reliance upon our perceptions of your and your owners' individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following may be transferred, mortgaged, pledged, or encumbered, without our prior written approval: (1) this Agreement or any interest in this Agreement, (2) your Shop or all or substantially all of its assets, or (3) any direct or indirect ownership interest in you. A transfer of your Shop ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement. Any transfer without our approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition, including transfer by reason of merger, consolidation, issuance of additional securities, death, disability, divorce, insolvency, encumbrance, foreclosure, surrender or by operation of law, and/or any transfer, surrender, loss of the possession, control, or management of your Shop.
If you intend to list your Shop for sale with any broker or agent, you shall do so only after obtaining our written approval of the broker or agent and of the listing agreement. You may not use or authorize the use of any Mark in advertising the transfer or other disposition of your Shop or of any ownership interest in you without our prior written consent. You shall not use or authorize the use of, and no third party shall on your behalf use, any written materials to advertise or promote the transfer of your Shop or of any ownership interest in you without our prior written approval.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, transferring the franchise agreement, a Cream shop, or any ownership interest in the franchise without prior written approval from Cream constitutes a breach of the agreement and renders the transfer ineffective. Cream emphasizes that the rights and duties created by the franchise agreement are personal to the franchisee and its owners, and the company grants the franchise based on its assessment of their character, skills, and financial capacity.
Cream defines "transfer" broadly to include any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition. This includes transfers resulting from mergers, consolidations, issuance of additional securities, death, disability, divorce, insolvency, encumbrance, foreclosure, surrender, or operation of law, as well as any loss of possession, control, or management of the Cream shop.
Furthermore, if a Cream franchisee intends to list their shop for sale with a broker or agent, they must first obtain Cream's written approval of both the broker/agent and the listing agreement. The franchisee is also prohibited from using Cream's trademarks in advertising the transfer or disposition of the shop or any ownership interest without prior written consent. All written materials used to advertise or promote the transfer must also receive Cream's prior written approval.