What happens if Cream does not exercise its right of first refusal for a Cream franchise transfer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not complete the sale to the proposed buyer within 60 days after we notify you that we do not intend to exercise our right of first refusal, or if there is a material change in the terms of the sale (which you agree to tell us promptly), we or our designee will have an additional right of first refusal on the same terms as described above.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if Cream decides not to exercise its right of first refusal, the franchisee can proceed with the sale to their proposed buyer, provided the transfer otherwise aligns with the conditions outlined in Section 12.B and Section 12.C of the agreement. This includes compliance from both the franchisee, their owners, and the transferee.
However, the sale must be completed within 60 days from the date Cream notifies the franchisee of its decision not to exercise its right of first refusal. If the sale is not completed within this timeframe, or if there are any material changes to the terms of the sale, the franchisor retains an additional right of first refusal. The franchisee is obligated to promptly inform Cream of any changes to the sale terms.
This clause ensures Cream maintains control over who joins their franchise system. The initial right of first refusal allows Cream to buy the franchise themselves if they don't approve of the proposed buyer. The 60-day window and the additional right of first refusal prevent franchisees from indefinitely seeking buyers or altering the terms to circumvent Cream's approval process.