What happens if a Cream franchisee dies or becomes disabled?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Agreement | Summary |
|---|---|---|
| of first refusal, or there is a material change in terms, we will have an additional right of first refusal. | ||
| (o) Franchisor’s | Franchise Agreement | We may purchase any or all of the assets of your Shop (including |
| option to | – Section 15.D | the Premises, if it is owned by you or one of your owners or |
| purchase | affiliates) upon the termination or expiration of the Franchise | |
| franchisee’s | Agreement. The purchase price will be based upon the net | |
| business | realizable value of the tangible assets in accordance with the liquidation basis of accounting. We may exercise this right by giving you written notice of our election within 30 days after the termination or expiration. If challenged, the purchase price will be determined by an appraiser designated by us, with costs and fees shared equally by both parties. While any decision regarding purchasing your Shop is pending, we may operate your Shop on an interim basis as provided in the Franchise Agreement. | |
| Area Development Agreement | Not Applicable | |
| (p) Death or | Franchise Agreement | Upon death or disability of you or your owners, the estate of such |
| disability of | – Section 12.D | person must transfer all interest in your Shop to a party we |
| franchisee | approve within 180 days following the date of death or disability. If, as a result of the death or incapacity of the transferor, your Shop is not otherwise being managed by a Shopkeeper, a personal representative must appoint a Shopkeeper who we approve and who has completed our then-current Initial Training Program to supervise the day-to-day operations of your Shop within 15 days from the date of death or disability. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, in the event of the death or disability of a Cream franchisee or their owners, the estate is required to transfer all interests in the Cream shop to a Cream-approved party within 180 days. This means that the franchisee's heirs or legal representatives have a limited time frame to find a buyer who meets Cream's standards. This ensures that the franchise continues to operate under suitable management even after the franchisee is no longer able to manage the business.
To maintain operational continuity during this transition, if the Cream shop is not already being managed by a Cream-approved Shopkeeper due to the death or incapacity, a personal representative must appoint one within 15 days of the death or disability. This Shopkeeper must have completed Cream's then-current Initial Training Program. This requirement ensures that someone qualified is overseeing the daily operations of the Cream shop, minimizing disruption and maintaining brand standards.
This transfer process is subject to Cream's approval, meaning that the franchisor has the right to vet and approve the new owner. This is a common practice in franchising, as it allows the franchisor to maintain control over who operates their branded locations. The prospective franchisee should inquire about the specific criteria Cream uses to approve potential transferees to better understand the requirements for a successful transfer in the event of death or disability.