What is the duration of the non-compete agreement for Cream franchisees after termination or expiration of the franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
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; and/or (2) 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:
- (a) within the Development Area, or
- (b) within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
If any person restricted by this Section fails to comply with these obligations as of the date of termination or expiration, the two-year restricted period for that person will commence on the date the person begins to comply with this Section, which may be the date a court order is entered enforcing
this provision. You and your owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting these skills. Consequently, our enforcing the covenants made in this Section will not deprive you of your personal goodwill or ability to earn a living. The restrictions in this Section will also apply after any transfer, to the transferor and its owners, for a period of two years beginning on the effective date of the transfer, with the force and effect as though this Agreement had been terminated for such parties as of such date.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees and their owners are subject to a non-compete agreement for two years following the termination or expiration of their franchise agreement. This restriction prevents them from having a direct or indirect interest in a Competitive Business or performing services for one.
The non-compete applies within the Development Area or within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop. If a person violates the non-compete, the two-year period begins when they cease the violating activity, potentially starting from the date of a court order enforcing the provision. The FDD states that these restrictions also apply to transferors after any transfer for two years, as if the agreement was terminated on the transfer date.
Cream emphasizes that franchisees possess general skills and abilities and have other opportunities to earn a living, so enforcing the non-compete will not deprive them of their personal goodwill or ability to earn a living. Franchisees should consider the geographic scope and duration of this restriction when evaluating the franchise opportunity, as it could limit their business activities after leaving the Cream system.