Does the definition of 'Competitive Business' for Cream include businesses where ice cream represents more than a specific percentage of gross revenue?

According to Cream's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined, in part, by the percentage of gross revenue derived from ice cream and related products. Specifically, the document states that a business is considered competitive if ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks, or similar products represents more than 10% of the total gross revenue.

This definition has significant implications for Cream franchisees. During the term of their franchise agreement, franchisees (and their owners) are restricted from having an interest in or performing services for any business that meets this definition of 'Competitive Business'. This restriction extends to their spouses, immediate family members, and other related parties. The only exception is for owning less than 5% of a publicly traded company on a recognized U.S. stock exchange.

This non-compete clause is designed to protect Cream's market share and prevent franchisees from using the brand's knowledge and resources to benefit competing businesses. Prospective franchisees should carefully consider this restriction and ensure they do not have any existing or planned business ventures that could be considered a 'Competitive Business' under this definition. Failing to comply with this clause could result in a breach of the franchise agreement.

It is important for potential Cream franchisees to fully understand the scope of this restriction and how it might impact their other business interests or those of their family members. They should seek legal counsel to ensure they are comfortable with the terms of the non-compete agreement before signing the franchise agreement.