What happens if a Cream developer or owner violates covenants in Section 3 of the Cream agreement?

According to Cream's 2025 Franchise Disclosure Document, if a developer or their owners violate any of the covenants made in Section 3 of the Development Agreement, Cream has the right to terminate the agreement. This termination is effective immediately upon delivery of written notice to the developer.

This means that any breach of the promises or agreements outlined in Section 3 could lead to an immediate end to the development rights granted to the developer. The FDD does not specify what these covenants in Section 3 are, but they are important enough that violating them gives Cream the right to terminate the agreement.

For a prospective Cream developer, this underscores the importance of carefully reviewing and understanding Section 3 of the Development Agreement. It is crucial to ensure full compliance with these covenants to avoid the risk of immediate termination and the loss of development rights. A prospective developer should seek legal counsel to fully understand their obligations under Section 3.

It is common in franchising for franchisors to reserve the right to terminate agreements for various breaches, but the specific terms and conditions vary. The immediate termination upon notice for violating Section 3 covenants highlights the significance Cream places on these particular obligations.