What criminal convictions of a Cream franchisee or owner can lead to a breach of the franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (6) you violate any law, ordinance, rule, or regulation of a governmental agency in connection with the exercise of your Development Rights, and fail to correct such violation within 72 hours after notice to you, whether from us or any other party;
- (7) you fail to pay us or our affiliates any amounts due and do not correct the failure within 10 days after written notice to you;
- (8) you (or any of your owners) (a) fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you; or (b) fail on two or more separate occasions within any 12 consecutive month period to comply with the same obligation under this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you;
- (9) you or any of your owners fail to comply with any other provision of this Agreement, and do not correct the failure within 30 days' notice to you; or
- (10) you or an affiliate fails to comply with any other agreement with us or our affiliate and do not correct such failure within the applicable cure period, if any.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
Based on the 2025 FDD, the document does not explicitly state what specific criminal convictions of a Cream franchisee or owner could lead to a breach of the franchise agreement. The FDD does outline general conditions related to legal and regulatory compliance, and repeated failures to comply with the agreement, which could potentially be triggered by certain criminal convictions.
Specifically, the FDD states that a franchisee's failure to comply with any law, ordinance, rule, or regulation of a governmental agency in connection with the exercise of their Development Rights, and failure to correct such violation within 72 hours after notice, can lead to termination. This suggests that if a criminal conviction results from violating such laws, it could potentially lead to a breach if not corrected promptly.
Additionally, the FDD mentions that repeated failures to comply with the agreement, even if the franchisee is notified and corrects the failures, can also lead to termination. Therefore, if a criminal conviction leads to repeated non-compliance with the franchise agreement, it could also result in a breach. Since the FDD does not provide an exhaustive list of criminal convictions that would trigger these clauses, prospective franchisees should seek clarification from Cream regarding specific scenarios that could lead to termination.