Does entering into the Cream franchise agreement guarantee a particular pricing structure for Proprietary Products?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to comply with all of our or our designated affiliates' and suppliers' instructions and policies for ordering Proprietary Products, which we may modify from time to time, and which may include auto-ordering policies. You further acknowledge and agree that the cost of Proprietary Products may fluctuate at any time and from time to time during the Term, and you have not entered into this Agreement in reliance on any particular pricing structure for Proprietary Products. We and our designated affiliates may modify any such pricing for Proprietary Products with 60 days' notice to you. All pricing from third-party suppliers will be on the terms dictated by such suppliers. All purchases of Proprietary Products will be subject to our or our designated affiliates' or suppliers' then-current terms and conditions and credit policies. We and our affiliates reserve the right to refuse orders or deny shipment of any Proprietary Products if you have any past due balance to us or our affiliates.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the Cream franchise agreement does not guarantee a particular pricing structure for Proprietary Products. The agreement states that the cost of Proprietary Products may fluctuate at any time during the term of the agreement. Cream, or its designated affiliates, can modify the pricing for Proprietary Products with 60 days' notice to the franchisee. Pricing from third-party suppliers will be dictated by those suppliers' terms.
This means that a Cream franchisee cannot rely on a fixed cost for the essential products needed to operate the business. These fluctuations can impact the franchisee's profitability and require careful management of inventory and pricing strategies. The franchisee bears the risk of cost increases for Proprietary Products, which could affect their bottom line.
Cream retains the right to allocate Proprietary Products among its various distribution channels, including Jeni's Ice Creams Scoop Shops, at its discretion if shortages occur. Additionally, Cream and its affiliates may derive revenue and profits from franchisee purchases, including through markups on products and services, and from supplier rebates or discounts. These factors highlight the importance of a Cream franchisee understanding the potential for cost variations and the franchisor's control over the supply chain and pricing of essential products.