What is the deadline for a Cream franchisee to pay Lost Revenue Damages after the termination of the agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to pay us Lost Revenue Damages within 30 days after this Agreement is terminated. You and we agree that the calculation described in this Section is a calculation only of the Lost Revenue Damages and that nothing herein shall preclude or limit us from proving and recovering any other damages caused by your breach of the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if the franchise agreement is terminated due to the franchisee's breach or if the franchisee terminates the agreement without cause, the franchisee is obligated to pay Lost Revenue Damages. Cream calculates these damages as the net present value of Royalties and Brand Fund Contributions that would have been due from the termination date until the earlier of (1) the 2nd anniversary of the termination date; or (2) the scheduled expiration of the Term. These amounts are based on average monthly Net Sales.
The FDD specifies that the franchisee must pay these Lost Revenue Damages within 30 days after the termination of the agreement. This means a franchisee needs to have the funds available promptly following termination to meet this obligation.
This requirement could pose a significant financial burden on a franchisee, especially if the termination occurs unexpectedly. Franchisees should be aware of this potential liability and factor it into their financial planning. It is also important to understand the conditions under which termination can occur and the methods Cream uses to calculate Lost Revenue Damages to anticipate potential costs.