What is the Cream franchisee's obligation regarding the Development Rights granted in the agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms of this Agreement, we hereby grant you the right to develop, own, and operate the number of Jeni's Ice Creams Scoop Shops specified in your Development Schedule (defined in Section 2.B) (your "Development Rights") strictly within the geographic area specified on Attachment A (your "Development Area"). You accept the grant of the Development Rights and agree to faithfully, honestly, and diligently perform your obligations under this Agreement and fully exploit the Development Rights during the Term (defined below) and throughout the entire Development Area. The term of this Agreement (the "Term") will begin on the Effective Date and, unless sooner terminated as provided herein, will expire on the earlier of (1) the date on which the last Jeni's Ice Creams Scoop Shops required to be opened in order to satisfy the Development Schedule opens for regular business, or (2) the last day of the last Development Period (defined below) of the Development Schedule. You may not extend the Term of this Agreement without our approval, which we will grant in our sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream grants the franchisee Development Rights to develop, own, and operate a specific number of Jeni's Ice Creams Scoop Shops within a defined geographic area. The franchisee, upon accepting these rights, is obligated to faithfully, honestly, and diligently perform their duties under the Area Development Agreement. This includes fully exploiting the Development Rights throughout the term of the agreement and within the entire Development Area.
The term of the Area Development Agreement for Cream begins on the effective date and concludes either when the last required Jeni's Ice Creams Scoop Shop opens for business, as per the Development Schedule, or on the final day of the last Development Period specified in the schedule. Extending the term of the agreement requires Cream's approval, which is granted at their discretion.
In practical terms, a Cream franchisee must commit to fulfilling the Development Schedule outlined in the agreement. This means opening the agreed-upon number of locations within the specified timeframes and geographic area. Failure to meet these obligations could result in a breach of contract and potential termination of the agreement. The franchisee should carefully review the Development Schedule and Development Area to ensure they are feasible and align with their business capabilities and resources. Furthermore, the franchisee should be aware that Cream retains rights not expressly granted to the franchisee and can operate or authorize others to operate Jeni's Ice Creams Scoop Shops outside the Development Area.