Can Cream engage in activities not expressly prohibited by the franchise agreement within a franchisee's protected territory?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
(6) be acquired by or acquire (regardless of the form of transaction(s)), any other business, including businesses that operate or allow others to establish and operate businesses similar to, the same, or competitive with Jeni's Ice Creams Scoop Shops, at any location in the world, including in the Protected Territory (and in the event of such an acquisition, we and/or the acquirer and its affiliates will have the right to continue to establish and operate, and authorize others to establish and operate, such businesses, at any location in the world, including in the Protected Territory); and
(7) engage in all other activities not expressly prohibited by this Agreement, at any location in the world, including in the Protected Territory.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream retains the right to engage in activities not expressly prohibited by the franchise agreement, even within a franchisee's protected territory. This means that while a franchisee has a protected territory, Cream can still undertake various business activities within that area, provided these activities are not specifically forbidden by the franchise agreement.
This reservation of rights allows Cream to adapt to market changes and pursue new business opportunities without being unduly restricted by territorial agreements. For a potential franchisee, this implies that the protected territory is not an exclusive domain. Cream could introduce new products, services, or business models that might compete with the franchisee's operations, as long as these are not explicitly prohibited in the agreement.
Cream's ability to operate other businesses and distribution channels, conduct marketing activities, and even be acquired by or acquire competing businesses within the protected territory highlights the importance of carefully reviewing the franchise agreement to understand what activities are indeed expressly prohibited. This ensures that franchisees are aware of the potential competitive landscape and the extent of their territorial protection.
The FDD specifies that Cream can:
- Establish other businesses and distribution channels, including selling products at retail, wholesale, or online, within the franchisee's protected territory.
- Establish and operate businesses in non-traditional venues such as airports, hospitals, or entertainment centers within the protected territory.
- Conduct marketing and promotional activities, including product giveaways, within the protected territory.
- Be acquired by or acquire other businesses, even those competitive with Cream, within the protected territory.