For the Cream franchise, when does the two-year restricted period begin for someone who initially fails to comply with Section 15.C obligations?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If any person restricted by this Section 15.C 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 15.C, 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 15.C will not deprive you of your personal goodwill or ability to earn a living.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a person restricted by Section 15.C of the Cream franchise agreement fails to comply with their obligations upon termination or expiration of the agreement, the two-year restricted period will commence on the date the person begins to comply with Section 15.C. This date could potentially be when a court order is issued to enforce the provision.
This means that a former Cream franchisee cannot simply ignore the non-compete obligations after their franchise agreement ends. The clock on the two-year restriction only starts ticking once they cease violating the terms, such as by discontinuing operation of a competing business within the restricted area.
This clause is designed to prevent franchisees from immediately opening a competing business and then claiming the non-compete has already expired. The FDD also states that Cream believes franchisees have general skills and other opportunities to earn a living, so enforcing the non-compete will not deprive them of their personal goodwill or ability to earn a living.