What is the form of notice required from Cream to a franchisee regarding termination?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
ect the failure within a reasonable time, you may terminate this Agreement effective an additional 30 days after you deliver to us written notice of termination. Your termination of this Agreement other than according to this Section 14.B will be deemed a termination without cause and a breach of this Agreement.
C. BY US.
We may terminate this Agreement, effective upon delivery of written notice to you, if:
(1) you or any of your owners have made or make any material misrepresentation or omission in acquiring the rights under this Agreement or in operating your Shop;
(2) you do not obtain lawful possession of a Premises we have approved and deliver to us a fully executed copy of the Lease and lease addendum we have approved for such Premises, in each case by the deadline set forth in Section 2.B;
(3) you do not satisfy all of your development obligations specified in this Agreement, including obtaining our approval prior to opening your Shop, and open your Shop for business by the deadline specified in Section 2.C;
(4) your Mandatory Trainees do not satisfactorily complete the Initial Training Program;
(5) you abandon or fail to actively operate your Shop for more than 3 consecutive days of operation, or you provide us or any other party notice (written or oral) that you intend to permanently close or otherwise abandon the operation of your Shop;
(6) you or any of your owners are or have been convicted of or have pleaded no contest or guilty to a felony;
(7) you fail to maintain the insurance we require and do not correct the failure within 10 days after we deliver written notice of that failure to you;
(8) you or any of your owners violate any of the covenants made in Section 5 (Marks), Section 6 (Proprietary Information) or Section 7 (Restrictive Covenants);
(9) you or any of your owners make or attempt to make an unauthorized transfer under Section 12;
(10) you sell any ice cream or other products for which we have specified Property Products at or from your Shop, other than the Proprietary Products we have specified, and do not cease such activity within 24 hours of notice from us;
(11) you fail to maintain sufficient inventory of Proprietary Products to satisfy demand at your Shop, other than by reason of shipping or supplier delays that are entirely outside of your control, and you do not order sufficient Proprietary Products to correct the shortfall within 48 hours of notice from us;
(12) an event of default occurs under the terms of your Lease, your Lease is terminated by either party thereto, or you otherwise lose the right to occupy the Premises, whether or not through any fault of yours;
(13) you violate any law, ordinance, rule, or regulation of a governmental agency in connection with the operation of your Shop and fail to correct such violation within 72 hours after notice to you, whether from us or any other party;
(14) you fail to pay us or our affiliates any amounts due and do not correct the failure within 10 days after notice to you, or fail to pay any third-party obligations owed in connection with your ownership or operation of your Shop and do not correct such failure within any cure periods permitted by the person to whom such obligations are owed;
(15) you fail to pay when due any federal or state income, service, sales, use, employment, or other taxes due on or in connection with the operation of your Shop, unless you are in good faith contesting your liability for these taxes;
- (16) you understate the Net Sales two times or more during the Term;
(17) you (or any of your owners) (i) fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you; or (ii) fail on two or more separate occasions within any 12 consecutive month period to comply with the same obligation under this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you;
(18) you create or allow to exist any condition in connection with your operation of your Shop, at any location, which we reasonably determine to present an immediate health or safety concern for your Shop's customers or employees;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream can terminate the franchise agreement with a written notice in several circumstances. If a franchisee fails to maintain the required insurance, Cream will provide a 10-day written notice to correct the failure. Similarly, if a franchisee sells unauthorized products, they have 24 hours from the notice to cease such activity. For failing to maintain sufficient inventory, a franchisee has 48 hours after notice to order sufficient products to correct the shortfall.
In cases where a franchisee violates any law related to their development rights, they have 72 hours after notice to correct the violation. If a franchisee fails to pay amounts due to Cream or its affiliates, they have 10 days after written notice to correct the failure. For non-compliance with other provisions of the agreement or other agreements with Cream or its affiliates, a 30-day notice is required to correct the failure.
Cream can also terminate the agreement effective upon delivery of written notice if the franchisee or their owners have made any material misrepresentation or omission, do not obtain lawful possession of the premises, do not satisfy development obligations, or if mandatory trainees do not complete the initial training program. Additional causes for immediate termination with written notice include abandoning the shop, a felony conviction of the franchisee or their owners, violation of covenants related to trademarks, proprietary information, or restrictive covenants, or making an unauthorized transfer.
Furthermore, the agreement can automatically terminate without notice under specific conditions such as assignment for the benefit of creditors, consenting to the appointment of a receiver, or filing for bankruptcy. If Cream materially fails to comply with the agreement, the franchisee must provide a 30-day written notice to Cream to correct the failure, and if Cream fails to do so, the franchisee can terminate the agreement with an additional 30-day written notice.