What is the franchisee's obligation regarding promises or covenants within the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms of this Agreement, we hereby grant you a franchise to develop, own, and operate a Jeni's Ice Creams Scoop Shop (your "Shop") on the terms described in this Agreement for a term that will begin on the Effective Date and will expire 10 years from your Effective Date unless sooner terminated under Section 14 (the "Term"). You agree to faithfully, honestly, and diligently perform your obligations under this Agreement and to use your best efforts to promote and operate your Shop from and after the Opening Date on a continuous basis for the entirety of the Term.
C. IF YOU ARE AN ENTITY.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, a Cream franchisee must faithfully, honestly, and diligently perform their obligations under the franchise agreement and use their best efforts to promote and operate their shop continuously throughout the term of the agreement. The initial term for a Cream franchise is 10 years, unless terminated earlier according to the terms outlined in the franchise agreement. This obligation begins from the shop's opening date.
Cream also emphasizes restrictive covenants, particularly regarding non-competition. During the franchise term, franchisees and their owners must not have any direct or indirect interest in a Competitive Business, perform services for a Competitive Business, or divert any business from a Jeni's Ice Creams Scoop Shop to a Competitive Business. A Competitive Business is defined as any business where ice cream or similar products constitute more than 10% of the total gross revenue, excluding other franchised Cream locations. These restrictions ensure the franchisee's commitment to the Cream brand and prevent conflicts of interest.
Even after the franchise agreement expires or is terminated, certain obligations continue. These include non-disparagement, non-competition, non-interference, confidentiality, information security, and indemnification. Specifically, for two years after termination or expiration, the franchisee and their owners must not engage in a Competitive Business within the Development Area or within a 5-mile radius of any other Cream shop. These continuing obligations protect Cream's market position and confidential information even after the formal franchise relationship ends. Cream can also unilaterally waive or reduce any obligation of or restriction upon the franchisee under the agreement by written instrument, which can be revoked with 10 days' prior written notice.