Can Cream disapprove a transfer based on the purchase price or terms of the transfer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
60-day period before you requested our consent to the transfer and the period between your request and the effective date of the transfer, including that you have paid all Royalties, Brand Fund Contributions, and other amounts owed to us, our affiliates, and third-party suppliers, and have submitted all required reports and statements;
- (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 can disapprove a transfer if the purchase price or other terms of the transfer will adversely affect the operation of your Shop or the transferee's fulfillment of your Development Rights. Cream requires that you provide executed versions of any documents executed by you (or your owners) and transferee (and its owners) to effect the transfer, and all other information Cream requests about the proposed transfer.
Cream's requirements include the terms, closing date, purchase price, amount of debt, and payment terms. Cream reviews this information to determine if the purchase price and other terms of the transfer will adversely affect the operation of your Shop. For transfers of the Development Rights, Cream will assess if the purchase price and terms will adversely affect the transferee's ability to fulfill the Development Rights.
This provision gives Cream significant discretion over approving transfers, as it allows them to consider the financial stability and future viability of the franchise under new ownership. A prospective franchisee should carefully consider this clause, as it could impact their ability to sell the franchise if Cream deems the terms of a potential sale unfavorable to the business's ongoing operations or the fulfillment of development agreements.