What determination must Cream make regarding the purchase price and other terms of the transfer of a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) you provide us executed versions of any documents executed by you (or your owners) and transferee (and its owners) to effect the transfer, and all other information we request about the proposed transfer, and such transfer meets all of our requirements, including terms, closing date, purchase price, amount of debt and payment terms, and we have determined that the purchase price and other terms of the transfer will not adversely affect the operation of your Shop;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream must determine that the purchase price and other terms of the transfer will not adversely affect the operation of the franchise shop. This is one of the requirements Cream has for approving a transfer of the franchise agreement.
This stipulation means that Cream has the right to reject a transfer if it believes the financial terms agreed upon between the seller and the buyer could harm the business. For example, Cream might be concerned if the purchase price is so high that the new franchisee is unlikely to generate sufficient profits, or if unfavorable payment terms could lead to financial instability.
As a prospective franchisee, it is important to understand that Cream's approval process includes a review of the financial aspects of any proposed transfer. Franchisees should ensure that the terms of any sale are reasonable and sustainable to avoid potential issues with franchisor approval. This requirement protects the Cream brand by ensuring that new franchisees are set up for success.