What happens if a Cream franchisee fails to comply with the obligations related to closing and de-identifying the shop?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
AND OBLIGATIONS UPON TERMINATION OR EXPIRATION**.
A. PAYMENT OF AMOUNTS OWED TO US.
You agree to pay us the Royalty, Brand Fund Contributions, late fees and interest, and all other amounts owed to us and our affiliates which then are unpaid within 30 days after this Agreement expires or is terminated.
B. DE-IDENTIFICATION.
Upon termination or expiration of this Agreement, you and your owners must immediately:
(1) close your Shop for business to customers and cease to directly or indirectly sell any products and services of any kind and in any manner from your Shop and/or using the Marks, unless we direct you otherwise in connection with our exercise of our option to purchase pursuant to Section 15.D;
(2) cease to directly or indirectly use any Mark, any colorable imitation of a Mark, other indicia of a Jeni's Ice Creams Scoop Shop, or any trade name, trademark, service mark, or other commercial symbol that indicates or suggests a connection or association with us or the System, in any manner or for any purpose (except in connection with other Jeni's Ice Creams Scoop Shops you operate in compliance with the terms of a valid Franchise Agreement with us);
(3) cease to directly or indirectly identify yourself or your business as a current or former Jeni's Ice Creams Scoop Shop or as one of our current or former franchise owners (except in connection with other Jeni's Ice Creams Scoop Shops you operate in compliance with the terms of a valid Franchise Agreement with us) and take the action required to cancel or assign all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
(4) if we do not exercise our option to purchase your Shop under Section 15.D below, promptly and at your own expense, make the alterations we specify to distinguish your Shop clearly from its former appearance and from other Jeni's Ice Creams Scoop Shops, including by removing all materials and signage bearing our Marks and removing from both the interior and exterior of the Premises all materials and components of our trade dress as we determine to be necessary in order to prevent public confusion and in order to comply with the non-competition provisions set forth in Section 15.C;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee has several obligations related to closing and de-identifying the shop. These include closing the shop, ceasing sales, and removing any association with the Cream brand.
Specifically, the franchisee must cease identifying as a current or former Cream franchisee, except when operating other franchised locations under a valid agreement. They must also cancel any registrations related to the use of Cream's marks. Unless Cream exercises its option to purchase the shop, the franchisee is responsible for altering the shop's appearance to clearly differentiate it from other Cream locations, including removing all materials and signage bearing Cream's marks and trade dress. The franchisee must also cease using and transfer control of all contact information and digital presences associated with the shop to Cream. All items, forms, and materials containing Cream's marks, as well as confidential information, must be returned or destroyed as directed by Cream. The franchisee must also comply with all system standards and applicable laws related to the closure and de-identification of the shop, including those concerning the disposal of personal information. Finally, the franchisee must provide satisfactory evidence of compliance with these obligations.
While the excerpt details the obligations for closing and de-identifying a Cream shop, it does not explicitly state the consequences of failing to meet these obligations. It is important for a prospective franchisee to understand the specific penalties or actions Cream may take if a franchisee does not comply with these post-termination requirements. A prospective franchisee should seek clarification from Cream regarding the repercussions of non-compliance with these obligations, as this information is not provided in this excerpt.