What is the definition of 'owner' according to the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
to do all other lawfully permitted acts to further the purposes of this Section with the same legal force and effect as if executed by you.
7. RESTRICTIVE COVENANTS.
A. NON-COMPETITION DURING TERM.
We have granted you the rights in this Agreement in consideration of and reliance upon your agreement to deal exclusively with us. You therefore agree that, during the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, representatives, affiliates, successors and assigns not to):
- (1) have any direct or indirect interest as an owner whether of record, beneficially, or otherwise – in a Competitive Business (defined below), wherever located or operating (except that equity ownership of less than 5% of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph);
- (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating; or
- (3) divert or attempt to divert any actual or potential business or customer of any Jeni's Ice Creams Scoop Shop to a Competitive Business.
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.
B.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
Based on the 2025 Cream Franchise Disclosure Document, the term 'owner' is referenced within the context of non-competition and non-interference agreements. While the document does not provide an explicit definition of 'owner,' it implies that the term encompasses individuals with a direct or indirect interest in the franchise.
Specifically, the franchise agreement stipulates that the franchisee, along with their 'owners,' must not engage in any competitive business during the term of the agreement. This restriction extends to current and former spouses, immediate family members, officers, directors, representatives, affiliates, successors, and assigns. The agreement also prohibits these individuals from interfering with Cream's relationships with customers, franchisees, lenders, vendors, or consultants, both during and after the franchise term.
Furthermore, if the franchisee is an entity such as a corporation, LLC, or partnership, Attachment A to the Franchise Agreement must accurately describe all owners and their interests as of the effective date. Any owner with a 10% or greater ownership interest in the entity must execute a guarantee, binding them to the terms of the agreement. This suggests that Cream considers anyone with a significant financial stake in the franchise to be an 'owner' for the purposes of enforcing the franchise agreement and protecting its interests.
In summary, while a precise definition is absent, the FDD indicates that 'owner' includes individuals with a direct or indirect financial interest, particularly those with 10% or greater ownership in an entity franchisee. Prospective franchisees should seek clarification from Cream regarding the specific criteria used to define an 'owner' and the implications for individuals associated with the franchise.