What happens to the goodwill from the use of the Marks by Cream?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We license the Marks from Parent under a License Agreement dated June 17, 2025 (the "License Agreement"). The term of the License Agreement will continue for 99 years from its effective date unless terminated. The License Agreement may be terminated (resulting in the loss of our right to use and to sublicense the use of the Marks to you) by mutual agreement of the parties, by us if Parent breaches its obligations and fails to cure such breach, or by Parent for a number of reasons, including if we default on any obligations, we are dissolved, or if we cease to be under Parent's control. All rights in and goodwill from the use of the Marks accrue to Parent. Except as described above, no agreement significantly limits our rights to use or sublicense the Marks in a manner material to the franchise.
Source: Item 13 — TRADEMARKS (FDD pages 39–40)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, all rights in and goodwill from the use of the Marks accrue to Cream's Parent company. Cream licenses the Marks from Parent under a License Agreement dated June 17, 2025. The License Agreement lasts for 99 years unless terminated.
This means that while franchisees use Cream's trademarks to build their business, the long-term value associated with the brand name and reputation ultimately benefits the Parent company, not Cream or its franchisees. This is a common arrangement in franchising, as the franchisor typically owns the brand and its associated goodwill.
Cream retains the right to modify, substitute, add, or discontinue any Marks or the System, and franchisees are obligated to comply with these changes without reimbursement for associated costs or lost revenue. This highlights the importance of the License Agreement between Cream and Parent, as its potential termination could significantly impact Cream's ability to sublicense the Marks to franchisees.