What constitutes a breach of the Cream franchise agreement regarding the Marks and the System?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to delegate the performance of any portion or all of our obligations under this Agreement to third-party designees, whether these designees are our agents or independent contractors with whom we have contracted to perform these obligations.
5. INTELLECTUAL PROPERTY.
A. OWNERSHIP AND GOODWILL.
You acknowledge and agree that the Marks and the System are owned by us and/or our affiliates. You acknowledge and agree that your use of the Marks and the System and any goodwill established by that use are exclusively for our and our affiliates' (as applicable) benefit. This Agreement does not confer any goodwill or other interests in the Marks or the System upon you (other than the right to operate your Shop under this Agreement). Your unauthorized use of the Marks and the System would be a breach of this Agreement and an infringement on the intellectual property rights of us and our affiliates (as applicable). Your unauthorized use of the Marks and the System will cause us and our affiliates (as applicable) irreparable harm for which there is no adequate remedy at law and will entitle us and our affiliates (as applicable) to injunctive relief. All provisions of this Agreement relating to the Marks and the System apply to any additional or modified components of the Marks and the System we authorize you to use. You may not at any time during or after the Term contest or assist any other person in contesting the validity of any registration for the Marks or the System, and/or our and our affiliates' (as applicable) rights to the Marks and the System.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, a Cream franchisee's unauthorized use of the Marks and the System constitutes a breach of the franchise agreement and an infringement on Cream's intellectual property rights. The agreement specifies that the Marks and the System are owned by Cream and/or its affiliates, and any goodwill established through their use benefits Cream exclusively. Franchisees only have the right to operate their shop under the agreement, and no other interests in the Marks or System are conferred.
Cream emphasizes that unauthorized use will cause irreparable harm and entitle Cream to injunctive relief. This means Cream can seek a court order to immediately stop the franchisee's unauthorized use. The agreement states that all provisions relating to the Marks and the System apply to any additional or modified components that Cream authorizes the franchisee to use.
Furthermore, franchisees are prohibited from contesting the validity of any registration for the Marks or the System, or Cream's rights to them, during and after the term of the agreement. This clause protects Cream's intellectual property by preventing franchisees from challenging its trademarks or operational methods. Cream also retains the right to modify the Marks and System, and franchisees must comply with these changes without reimbursement for associated costs or lost revenue.