To what extent will Cream enforce the termination provision related to bankruptcy in the Franchise Agreement?

According to Cream's 2025 Franchise Disclosure Document, the franchise agreement provides for termination upon bankruptcy. However, for franchisees in Maryland, the disclosure states that this provision might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.). Cream will enforce the provision regarding termination upon bankruptcy to the extent that it is enforceable.

Cream's stance on enforcing the termination provision related to bankruptcy is conditional, particularly in Maryland, where the enforceability of such provisions is questionable under federal bankruptcy law. This means that while Cream intends to enforce the clause, its ability to do so may be limited by legal constraints.

For a prospective Cream franchisee, this implies a degree of uncertainty. While the franchise agreement stipulates termination upon bankruptcy, the actual outcome could depend on the specific circumstances and the prevailing interpretation of federal bankruptcy law. It would be prudent for potential franchisees to seek legal counsel to fully understand their rights and obligations in the event of bankruptcy, especially in light of Cream's stated intention to enforce the provision to the extent possible.