Does the definition of 'Competitive Business' under the Cream franchise agreement include other Jeni's Ice Creams Scoop Shop franchises?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Competitive Business" means any business (excluding any Jeni's Ice Creams Scoop Shop operated under a franchise agreement with us) operating or granting franchises or licenses to others to operate any business for which 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.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the definition of a "Competitive Business" specifically excludes other Jeni's Ice Creams Scoop Shops operated under a franchise agreement with Cream. This means that the non-compete clauses in the franchise agreement do not prevent a Cream franchisee from owning or working at another Jeni's Ice Creams Scoop Shop.
This exclusion has significant implications for prospective franchisees. It clarifies that the primary focus of the non-compete agreement is to prevent franchisees from engaging in businesses that directly compete with the Cream franchise concept outside of the Cream system. The non-compete clause aims to protect Cream from franchisees using the franchisor's confidential information and business model to benefit a competing brand.
However, Cream and its affiliates retain various rights that could impact a franchisee's business. Cream can establish and operate Jeni's Ice Creams Scoop Shops outside a franchisee's Development Area, establish other types of businesses (even those offering similar products) under different brand names, and operate Jeni's Ice Creams Scoop Shops in non-traditional venues, even within the Development Area. These reserved rights highlight the importance of carefully evaluating the potential for competition from Cream itself and other channels, even if other Jeni's Ice Creams Scoop Shop franchises are not considered "Competitive Businesses" under the agreement.