What is the definition of 'Premises' in the context of the Cream non-competition covenant after termination?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to take any of the actions or refrain from taking any of the actions described above, we may take whatever action and sign whatever documents we deem appropriate on your behalf to cure the deficiencies, including, without liability to you or third parties for trespass or any other claim, to enter the Premises and remove any signs or other materials containing any Marks from your Shop. You must reimburse us for all costs and expenses we incur in correcting any such deficiencies. You hereby appoint us as your true and lawful attorney-in-fact to take such actions and execute such documents on your behalf as may be required to effect the foregoing purposes.
C. COVENANT NOT TO COMPETE.
For two years beginning on the date of termination or expiration of this Agreement, 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, employees, 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; (2) lease or sublease the Premises to a Competitive Business; and/or (3) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, in each case, if such Competitive Business is located or operating:
- (i) at the Premises or within a 5-mile radius of the Premises, or
- (ii) within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the non-competition covenant after termination restricts franchisees and their owners from engaging in competitive business activities. Specifically, they cannot have a direct or indirect interest in a Competitive Business, lease or sublease the Premises to a Competitive Business, or perform services for a Competitive Business. This restriction applies if the Competitive Business is located or operating at the Premises or within a 5-mile radius of the Premises, or within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
The term 'Premises' refers to the physical location where the Cream franchise is operated. This is further supported by the document's reference to the landlord acknowledging that the tenant (franchisee) intends to operate a Jeni's Ice Creams Scoop Shop at the Premises. The landlord also agrees not to take any action that would prohibit the tenant from operating the Jeni's Ice Creams Scoop Shop at the Premises, as contemplated by the Franchise Agreement.
In practical terms, this means that after the franchise agreement is terminated or expires, the franchisee cannot operate a competing business from the same physical location where their Cream franchise was located. They are also restricted from leasing or subleasing that location to another competing business. This restriction is in place for two years, and it also extends to a 5-mile radius around the former Cream location and any other Cream location. This is a fairly standard non-compete clause in franchising, designed to protect the brand and other franchisees from unfair competition by a former franchisee who may have gained knowledge and experience while operating the Cream franchise.