In the event of a transfer of a beneficial or ownership interest in a Cream franchise, what specific document must the transferee(s) sign?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) the transferee must (if the transfer is of this Agreement or your Shop), sign our then-current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, including the Royalty and the Brand Fund Contribution; provided, that the term of the new franchise agreement signed will equal the then-remaining Term;
- (9) the transferee(s) must (if the transfer is any beneficial or ownership interest in you) (i) sign our then-current form of guaranty undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us, and (ii) provide us with an updated Attachment A;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a transfer involves any beneficial or ownership interest in the franchise, the transferee(s) must sign Cream's then-current form of guaranty. This guaranty undertakes that the transferee will be personally bound, jointly and severally, by all provisions of the Franchise Agreement and any ancillary agreements between the franchisee and Cream. Additionally, the transferee(s) must provide Cream with an updated Attachment A.
This requirement ensures that Cream maintains control over who is involved in the franchise and that all parties are legally bound to the terms of the agreement. The personal guaranty means that the transferee is personally liable for the franchise's obligations, which is a common practice in franchising to ensure commitment and accountability.
It is important for a prospective Cream franchisee to understand the implications of signing a personal guaranty, as it puts their personal assets at risk should the franchise fail to meet its financial or contractual obligations. Additionally, the franchisee should review the then-current form of guaranty to understand the full scope of the obligations they will be undertaking.