In the Cream franchise agreement, what happens if a System Standard is deemed unlawful?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires, or some other action that this Agreement does not require, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any System Standard is invalid, unenforceable, or unlawful, the notice or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and we may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. You agree to be bound by any promise or covenant imposing the maximum duty the law permits which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if any System Standard within the Cream franchise agreement is deemed invalid, unenforceable, or unlawful due to an applicable law or rule, Cream may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. The notice or other action required by the law or rule will be substituted for the comparable provisions of the Franchise Agreement.
This means that Cream has the right to make necessary changes to the franchise agreement or System Standards to ensure compliance with local, state, or federal laws. This could involve altering specific requirements or removing them altogether if they are found to be illegal.
For a prospective Cream franchisee, this clause offers a degree of protection, ensuring that they will not be held to standards that violate the law. However, it also grants Cream the power to unilaterally modify the agreement or standards, which could potentially impact the franchisee's operations. Franchisees should stay informed of any changes and seek clarification from Cream regarding their implications.