factual

Does the Cream franchise agreement require the franchisee to receive compensation if Cream operates other businesses within the Development Area?

Cream Franchise · 2025 FDD

Answer from 2025 FDD Document

For the avoidance of doubt, we reserve for ourselves and our affiliates all rights not expressly granted to you in this Agreement and the right to do all things that we do not expressly agree in this Agreement not to do, in each case, without compensation to you, without regard to proximity to your Development Area, and on such terms and conditions as we deem appropriate. For example, and without limitation, we and our affiliates may, ourselves or through authorized third parties:

  • (1) establish and operate, and allow others to establish and operate, other Jeni's Ice Creams Scoop Shops using the System, at any location outside the Development Area, on such terms and conditions we deem appropriate;
  • (2) establish and operate, and allow others to establish and operate, any other type of business, including any business that may offer products and services which are identical to, similar to, or competitive with products and services offered by Jeni's Ice Creams Scoop Shops, under trade names, trademarks, service marks, and commercial symbols other than the "Jeni's® " name and marks, anywhere in the world, including in the Development Area;
  • (3) establish, and allow others to establish, businesses and distribution channels other than a Jeni's Ice Creams Scoop Shop (including, selling products at retail, wholesale, or through any online presence), wherever located or operating, including in your Development Area, regardless of the nature or location of the customers with whom such other businesses and distribution channels do business, regardless of the nature or location of the customers with whom such other businesses and distribution channels do business, including businesses that

Source: Item 23 — RECEIPTS (FDD pages 61–192)

What This Means (2025 FDD)

According to the 2025 FDD, the Cream franchise agreement does not require Cream to compensate the franchisee if Cream or its affiliates operate other types of businesses, even those that are similar to Cream, within the franchisee's Development Area. Cream retains all rights not expressly granted to the franchisee in the agreement, allowing them to operate other businesses without providing compensation to the franchisee.

Specifically, Cream and its affiliates have the right to establish and operate any other type of business, including those offering products and services identical or similar to those of Cream Scoop Shops, under different trade names and trademarks within the Development Area. They can also establish other businesses and distribution channels, such as retail or wholesale sales, including online, within the franchisee's Development Area.

This means that a Cream franchisee could potentially face competition from other businesses operated by Cream itself or its affiliates within their designated Development Area without receiving any compensation. Prospective franchisees should consider this when evaluating the potential market and revenue for their Cream franchise, as the franchisor has broad rights to operate competing businesses nearby.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.