What documents must a Cream franchisee execute to assist in securing ownership rights to Innovations?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not originally sign this Agreement as an Entity, you may transfer this Agreement to an Entity; provided, that: (1) such Entity conducts no business other than the fulfillment of your Development Rights and the operation of Jeni's Ice Creams Scoop Shops; (2) you maintain management control of such Entity; (3) you own and control 100% of the economic interests, equity, and voting power of all issued and outstanding ownership interests in such Entity; (4) you satisfy all
conditions applicable to a transfer described in Section 4.C, except that we will not require payment of a transfer fee as described in Section 4.C(7) (provided, that you reimburse us for any direct costs we incur in connection with documenting and otherwise processing such transfer, including reasonable legal fees) and our right of first refusal under Section 4.E will not apply; and (5) that Entity must expressly assume all of your obligations under this Agreement. You agree to remain personally liable under this Agreement as if the transfer to the Entity did not occur, including by signing our then-current form of personal guaranty of the obligations of such Entity. You must also sign the form of consent to assignment and assignment satisfactory to us which may include a release of any and all claims (except for claims which cannot be released or waived pursuant to an applicable franchise law statute) against us and our affiliates, and our and their owners, officers, directors, employees, and agents.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a Cream franchisee wishes to transfer their rights to a wholly-owned entity, they must sign specific documents to ensure the transfer is completed according to Cream's standards. The franchisee must sign Cream's then-current form of personal guaranty of the obligations of such entity, ensuring they remain personally liable under the agreement even after the transfer. Additionally, the franchisee must sign a form of consent to assignment and assignment satisfactory to Cream, which may include a release of any and all claims against Cream and its affiliates.
These requirements are in place to protect Cream's interests and ensure that the franchisee remains committed to fulfilling their obligations, even when operating through a separate legal entity. By requiring a personal guaranty, Cream ensures that the original franchisee remains financially responsible for the performance of the franchise. The consent to assignment and assignment document further solidifies the transfer process and protects Cream from potential legal claims related to the transfer.
It is important to note that these document requirements are in addition to other conditions that must be met for the transfer to be approved. These conditions include ensuring that the entity conducts no other business than operating Cream shops, the franchisee maintains management control of the entity, and the franchisee owns and controls 100% of the economic interests, equity, and voting power of the entity. Meeting all these conditions and signing the required documents are crucial steps for a Cream franchisee looking to transfer their development rights to a wholly-owned entity while maintaining compliance with the franchise agreement.