Who is the Cream franchise agreement binding upon?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We have granted you the rights in this Agreement in consideration of and reliance upon your agreement to deal exclusively with us. You therefore agree that, during the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, representatives, affiliates, successors and assigns not to):
- (1) have any direct or indirect interest as an owner whether of record, beneficially, or otherwise – in a Competitive Business (defined below), wherever located or operating (except that equity ownership of less than 5% of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph);
- (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating; or
- (3) divert or attempt to divert any actual or potential business or customer of any Jeni's Ice Creams Scoop Shop to a Competitive Business.
The term "Competitive Business" means any business (excluding any Jeni's Ice Creams Scoop Shop operated under a franchise agreement with us) operating or granting franchises or licenses to others to operate any business for which ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks, or similar products represents more than 10% of the total gross revenue.
D. NON -INTERFERENCE.
During and after the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors and assigns not to) solicit, interfere, or attempt to interfere with our or our affiliates' relationships with any customers, franchisees, lenders, vendors, or consultants.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the Cream franchise agreement has specific implications for the franchisee, their owners, and related parties concerning competitive activities and interference both during and after the term of the agreement.
Specifically, during the term of the agreement, the franchisee and their owners must not engage in any Competitive Business, defined as any business (excluding other Cream franchises) where ice cream or similar products constitute more than 10% of gross revenue. This restriction extends to preventing current and former spouses, immediate family members, owners, officers, directors, representatives, affiliates, successors, and assigns from holding an interest in a Competitive Business (with a minor exception for publicly traded companies where ownership is less than 5%). They are also prohibited from working for or diverting business from any Cream Scoop Shop to a Competitive Business.
Furthermore, both during and after the franchise term, the franchisee and the aforementioned related parties are barred from interfering with Cream's relationships with customers, franchisees, licensees, lenders, suppliers, or consultants. This broad non-interference clause aims to protect Cream's business relationships and goodwill. The franchisee is expected to actively ensure that all related parties adhere to these restrictions, highlighting the comprehensive nature of the obligations under the franchise agreement.