Can Cream forgive or waive claims against the Brand Fund?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We will account for the Brand Fund separately from our other funds. However, neither we nor any of our affiliates has any fiduciary obligation to you or any other person for administering the Brand Fund. The Brand Fund may spend in any fiscal year more or less than the total Brand Fund Contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We may administer the Brand Fund through a separate entity whenever we deem appropriate, and such entity will have all of the rights and duties specified herein. We have the right, but no obligation, to use collection agents and institute legal proceedings to collect Brand Fund Contributions at the Brand Fund's expense. We may also forgive, waive, settle, and compromise all claims by or against the Brand Fund in our sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream has the authority to forgive, waive, settle, and compromise claims related to the Brand Fund. This means Cream has broad discretion in managing the Brand Fund's financial matters.
This provision grants Cream significant flexibility in handling disputes or debts involving the Brand Fund. For a potential franchisee, this could mean that Cream might choose to forgo collecting contributions from some franchisees under certain circumstances, or resolve disputes over fund usage in a way that benefits Cream. While this discretion could be used to benefit franchisees, it also carries the risk that Cream could make decisions that are not in the best interest of all franchisees.
It is important for prospective franchisees to understand that Cream's decisions regarding the Brand Fund are made in its sole discretion, and there is no guarantee that these decisions will directly benefit each individual franchise. Franchisees should inquire about the specific policies and procedures Cream uses to manage the Brand Fund and resolve disputes, to better understand how these decisions might impact their investment.
The FDD also states that neither Cream nor its affiliates have any fiduciary obligation to franchisees regarding the Brand Fund. This further emphasizes that Cream has considerable latitude in how it manages the fund, and franchisees have limited recourse if they disagree with Cream's decisions.