Is the Cream franchisee's Protected Territory affected by the franchisee's compliance with the Franchise Agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
than the Premises. You may not conduct any business of your Shop from any location other than the Premises except as authorized by us.
E. PROTECTED TERRITORY.
Subject to your continued compliance with this Agreement, and the reserved rights described below, during the Term, neither we nor any of our affiliates will establish, operate, or authorize any other person to establish or operate a Jeni's Ice Creams Scoop Shop in the area described in Attachment C (the "Protected Territory"). If you have not selected a site for your Shop as of the Effective Date, we will identify the Protected Territory once you sign your approved Lease, as described in Section 2.B below. Until such time as we execute Attachment C to identify an approved Premises and Protected Territory for your Shop, you do not have a Protected Territory and/or any other territorial protection of any kind, including in the Site Selection Area and/or any other area surrounding your Premises.
Other than your Protected Territory, you have no territorial protection and we and our affiliates retain all rights to conduct business activities of any kind, including the right to:
- (1) establish and operate, and allow others to establish and operate, other Jeni's Ice Creams Scoop Shops using the Marks and the System, at any location outside the Protected Territory, on such terms and conditions we deem appropriate;
- (2) establish and operate, and allow others to establish and operate, any other type of business, including any business that may offer products and services which are identical to, similar to, or competitive with products and services offered by Jeni's Ice Creams Scoop Shops, under trade names, trademarks, service marks, and commercial symbols other than the Marks, anywhere in the world, including in the Protected Territory;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, a Cream franchisee's protected territory is contingent upon their compliance with the Franchise Agreement. Cream states that as long as the franchisee continues to comply with the agreement, Cream and its affiliates will not establish or authorize anyone else to operate a Cream shop within the franchisee's designated Protected Territory during the term of the agreement. The specifics of the Protected Territory are detailed in Attachment C of the Franchise Agreement.
However, if a Cream franchisee has not yet selected a site for their shop by the Effective Date of the agreement, the Protected Territory will only be defined once the franchisee signs an approved lease. Until Attachment C is executed with the approved premises and Protected Territory, the franchisee does not have any territorial protection. This implies that site selection and lease approval are critical steps in securing the protected territory promised in the franchise agreement.
Furthermore, Cream retains the right to conduct business activities of any kind, including establishing other types of businesses (even those offering similar products) under different trade names, trademarks, and service marks, within the Protected Territory. Cream also states that if the franchisee fails to comply with the Development Schedule, Cream reserves the right to terminate or reduce the size of the Development Area, and/or terminate the territorial protections.