Does the Cream Franchise Agreement specify the location where the non-compete applies after termination?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
E. COVENANT NOT TO COMPETE.
For two years beginning on the date of termination or expiration of this Agreement, 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) have any direct or indirect interest as an owner (whether of record, beneficially, or otherwise) in a Competitive Business; and/or (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, in each case, if such Competitive Business is located or operating:
- (a) within the Development Area, or
- (b) within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
If any person restricted by this Section fails to comply with these obligations as of the date of termination or expiration, the two-year restricted period for that person will commence on the date the person begins to comply with this Section, which may be the date a court order is entered enforcing
this provision. You and your owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting these skills. Consequently, our enforcing the covenants made in this Section will not deprive you of your personal goodwill or ability to earn a living. The restrictions in this Section will also apply after any transfer, to the transferor and its owners, for a period of two years beginning on the effective date of the transfer, with the force and effect as though this Agreement had been terminated for such parties as of such date.
F. CONTINUING OBLIGATIONS.
All of our and your (and your owners') obligations which expressly or by their nature survive this Agreement's expiration or termination will continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire, including all obligations relating to non-disparagement, non-competition, non-interference, confidentiality, information security, Innovations, and indemnification.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Franchise Agreement does specify the locations where the non-compete applies after termination or expiration of the agreement. For a period of two years, the franchisee and their owners are restricted from having an interest in or performing services for a Competitive Business.
The restricted area includes (a) the Development Area and (b) within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop. The agreement clarifies that if someone fails to comply with these obligations, the two-year restricted period will begin when they start complying with the terms, potentially starting from the date of a court order enforcing the provision.
Cream emphasizes that the franchisee possesses general skills and abilities, and enforcing these non-compete covenants will not deprive them of their personal goodwill or ability to earn a living. These restrictions also apply to transferors and their owners for two years following the effective date of the transfer, as if the agreement had been terminated for those parties on that date. The obligations related to non-competition continue even after the agreement expires or terminates.