For a Cream franchise, is the franchisor required to reimburse the franchisee for loss of revenue due to modifications to the Marks or System?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand that the Marks and the System may evolve over time, including after you sign this Agreement. If we decide to modify, substitute, add, or discontinue the use of any Marks or the System, you agree to make such modifications and updates as we specify and to comply with all other directions we give regarding the use of the Marks and the System in connection with your Shop within a reasonable time after receiving notice from us. We are not required to reimburse you for any costs or expenses associated with making such changes, promoting a modified or substitute Mark, or for any loss of revenue due to any modification to the Marks or System.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream is not required to reimburse franchisees for any loss of revenue that may occur due to modifications to the Marks or System. The FDD states that the Marks and System may evolve over time, even after the franchise agreement is signed. Cream has the right to modify, substitute, add, or discontinue the use of any Marks or the System. Franchisees are obligated to make the modifications and updates specified by Cream within a reasonable time after receiving notice.
This means that if Cream decides to change its branding, operational procedures, or any other aspect of the franchise system, franchisees must comply with these changes. Cream is not obligated to compensate franchisees for any costs or expenses associated with implementing these changes or for any potential loss of revenue resulting from the modifications. This could include costs related to updating signage, retraining staff, or adjusting marketing materials.
This policy places the financial burden of system-wide changes on the franchisee, which is a common practice in franchising. While Cream is not obligated to reimburse franchisees for lost revenue, franchisees should factor in the potential costs of future system modifications when evaluating the franchise opportunity. It is important for prospective franchisees to understand that they will be responsible for adapting to changes in the Cream system at their own expense.