For the Cream franchise, what is the purpose of the Development Fee, in relation to the initial franchise fee?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
On the Effective Date, you must pay us an area development fee (the "Development Fee") specified on Attachment B of this Agreement. The Development Fee is fully earned by us when you sign this Agreement. The Development Fee will be in lieu of the initial franchise fee due for the Jeni's Ice Creams Scoop Shops that you develop pursuant to the Development Schedule, which would otherwise be owed pursuant to each applicable Franchise Agreement.
On your execution of this Agreement, you will also execute the Franchise Agreement for your first Jeni's Ice Creams Scoop Shop (the "Franchise Agreement") to be developed and opened in satisfaction of the Development Schedule (though provided you have paid your Development Fee in full as provided in Section 2.A, no initial franchise fee will be owed under that Franchise Agreement).
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Development Fee is paid by franchisees who enter into an area development agreement to develop multiple Cream Scoop Shops. The Development Fee serves as a substitute for the initial franchise fee that would otherwise be required for each individual Scoop Shop developed under the development schedule.
Specifically, the Development Fee is determined and specified in Attachment B of the area development agreement. This fee is fully earned by Cream upon the signing of the agreement. By paying the Development Fee, the franchisee is not required to pay the standard initial franchise fee for each of the Jeni's Ice Creams Scoop Shops they develop according to the agreed-upon development schedule.
For the first Jeni's Ice Creams Scoop Shop to be developed, the franchisee will execute a Franchise Agreement, but no initial franchise fee will be owed if the Development Fee has been paid in full. For each subsequent Scoop Shop, the franchisee will sign Cream's current Franchise Agreement when the site is approved. This arrangement allows Cream to collect revenue upfront for the development rights while enabling the franchisee to spread out the costs associated with opening multiple locations.