Are Cream franchisees allowed to provide truthful testimony in a legal proceeding, despite the non-disparagement clause?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
During and after the Term, 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) disparage or otherwise speak or write negatively, directly or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees or developers of us or our affiliates, the Jeni's ® brand, the System, any Jeni's Ice Creams Scoop Shop, any other brand or service-marked or trademarked concept operated or franchised by us or our affiliates, or take any other action which would, directly or indirectly, subject any of the foregoing to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System. Notwithstanding anything to the contrary, in no event will you be prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation. In addition, nothing in this Agreement shall prohibit you from reporting a suspected violation of law to the appropriate governmental agency or authority.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees are not prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation, despite the non-disparagement clause. This means that even though franchisees agree not to speak negatively about Cream, its affiliates, or the Cream system, this restriction does not prevent them from providing truthful testimony if they are required to do so in a legal or governmental context.
This provision protects the franchisee's right to comply with legal obligations without fear of repercussions from Cream related to the non-disparagement clause. It ensures that franchisees can participate in legal proceedings and investigations honestly and transparently.
Many franchise agreements include non-disparagement clauses to protect the brand's reputation. However, it is also common practice to include exceptions that allow for truthful testimony in legal matters, balancing the franchisor's need to protect its brand with the franchisee's legal obligations and rights.