Does the Cream franchise agreement confer any goodwill in the Marks or System to the franchisee?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
C. NON-DISPARAGEMENT.
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): (1) disparage or otherwise speak or write negatively, directly or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Jeni's® brand, the System, any Jeni's Ice Creams Scoop Shop, any business using the Marks, or any other brand concept operated, licensed, or franchised by us or our affiliates; or (2) take any other action which would, directly or indirectly, subject any of the foregoing to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System or the Marks. Notwithstanding anything to the contrary, in no event will you be prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation. In addition, nothing in this Agreement shall prohibit you from reporting a suspected violation of law to the appropriate governmental agency or authority.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the Cream franchise agreement does not confer any goodwill in the Marks or System to the franchisee. Instead, Cream franchisees are prohibited from taking any action that would negatively impact or injure the goodwill of the System or the Marks. This restriction applies both during and after the term of the franchise agreement.
Specifically, the non-disparagement clause in Cream's franchise agreement states that franchisees (and their associates) must not speak or write negatively about Cream, its affiliates, directors, officers, employees, representatives, current and former franchisees, the Jeni's® brand, the System, any Jeni's Ice Creams Scoop Shop, or any business using the Marks. The franchisee also cannot take any action that would subject any of the aforementioned parties to ridicule, scandal, reproach, scorn, or indignity.
This clause protects Cream's brand reputation and goodwill, ensuring that franchisees do not damage the brand's image through negative comments or actions. While franchisees contribute to the goodwill of the Cream brand through their operation of the franchise, the franchise agreement ensures that the goodwill remains the property of Cream and is not transferred to the franchisee.