What constitutes a termination without cause and a breach of the Cream franchise agreement by the franchisee?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and your owners are fully complying with this Agreement and we materially fail to comply with this Agreement and do not correct the failure within 30 days after you deliver written notice of the material failure to us or if we cannot correct the failure within 30 days and we fail to give you within 30 days after your notice reasonable evidence of our effort to correct the failure within a reasonable time, you may terminate this Agreement effective an additional 30 days after you deliver to us written notice of termination. Your termination of this Agreement other than according to this Section 5.B will be deemed a termination without cause and a breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a franchisee's termination of the agreement is considered a termination without cause and a breach of the agreement if it does not adhere to the specific procedure outlined in Section 5.B. This section stipulates that the franchisee can only terminate the agreement if Cream materially fails to comply with the agreement and does not rectify this failure within 30 days after receiving written notice from the franchisee.
Furthermore, if Cream cannot correct the failure within the initial 30-day period, they must provide reasonable evidence of their effort to correct the failure within a reasonable timeframe. Should Cream fail to provide such evidence within 30 days after the franchisee's notice, the franchisee can then terminate the agreement, effective 30 days after delivering a written notice of termination to Cream. Any termination by the franchisee that deviates from this process is deemed a termination without cause and a breach of the franchise agreement.
This provision is important for prospective Cream franchisees as it outlines the specific steps and conditions under which they can terminate the franchise agreement without being in breach. Failure to follow this procedure could result in legal and financial repercussions for the franchisee. It is essential for franchisees to understand and adhere to these terms to protect their rights and avoid potential liabilities.