Is the Development Fee for Cream Scoop Shops refundable?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
is non-refundable.
Development Fee
If you are signing an Area Development Agreement, you must pay a development fee when you sign the Area Development Agreement (the "Development Fee"). The Development Fee will be: (i) $105,000 for three Jeni's Ice Creams Scoop Shops; (ii) $140,000 for four Jeni's Ice Creams Scoop Shops; and (iii) $150,000 for five Jeni's Ice Creams Scoop Shops. The Development Fee will be paid in lieu of the Initial Franchise Fee due for the Jeni's Ice Creams Scoop Shops that you develop pursuant to the Development Schedule, which would otherwise be owed pursuant to each applicable Franchise Agreement. The Development Fee is
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Development Fee is non-refundable. If a prospective franchisee signs an Area Development Agreement, they must pay a development fee. The amount of the Development Fee varies depending on the number of Cream Scoop Shops the franchisee commits to develop. For three shops, the fee is $105,000; for four shops, it's $140,000; and for five shops, it totals $150,000.
This Development Fee is paid in place of the initial franchise fee that would otherwise be required for each individual Cream Scoop Shop under a standard Franchise Agreement. The FDD clearly states that the Development Fee is payable in a lump sum and is non-refundable. This means that once the Area Development Agreement is signed and the fee is paid, the franchisee cannot get this money back, even if they do not open all of the agreed-upon locations.
This non-refundable policy is a significant financial consideration for potential Cream franchisees. It highlights the importance of thorough due diligence and careful planning before entering into an Area Development Agreement. Franchisees should be confident in their ability to meet the development schedule and open the agreed-upon number of locations, as failure to do so will not result in a refund of the substantial Development Fee. Cream earns the development fee fully upon signing the agreement.
Prospective Cream franchisees should carefully evaluate their financial resources, market conditions, and ability to secure suitable locations before committing to an Area Development Agreement. Understanding the non-refundable nature of the Development Fee is crucial for making an informed investment decision.