What happens if a Protected Territory is not designated in my Cream Franchise Agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you have not selected a site for your Shop as of the effective date of the Franchise Agreement, we will identify the Protected Territory once you sign your approved Lease. If a Protected Territory is not designated in your Franchise Agreement, or until such time that one is, you have not been awarded any Protected Territory. If we identify a site selection area in your Franchise Agreement, that area is strictly to limit your site selection activities. You will receive no territorial protection of any kind in the site selection area, or any other geographic area, other than your Protected Territory.
Other than your Protected Territory, if any, you have no territorial protection and we and our affiliates retain all rights to conduct business activities of any kind in any location, including the right to:
(1) establish and operate, and allow others to establish and operate, other Jeni's Ice Creams Scoop Shops using the Marks and the System, at any location outside the Protected Territory, on such terms and conditions we deem appropriate;
(2) establish and operate, and allow others to establish and operate, any other type of business, including any business that may offer products and services which are identical to, similar to, or competitive with products and services offered by Jeni's Ice Creams Scoop Shops, under trade names, trademarks, service marks, and commercial symbols other than the Marks, anywhere in the world, including in the Protected Territory;
(3) establish, and allow others to establish, businesses and distribution channels other than a Jeni's Ice Creams Scoop Shop (including, selling products at retail, wholesale, or through any Digital Presence), wherever located or operating, including in your Protected Territory, regardless of the nature or location of the customers with whom such other businesses and distribution channels do business, including businesses that operate under trade names, trademarks, service marks, or commercial symbols that are similar to, the same, or competitive with the Marks, and/or that sell products or services similar to and/or the same as those that Jeni's Ice Creams Scoop Shops sell, including the offer and sale of Jeni's® -branded ice cream or products at third-party businesses;
Source: Item 12 — TERRITORY (FDD pages 35–39)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a Protected Territory is not designated in the Franchise Agreement, the franchisee will not be awarded any territorial protection. Cream retains the right to conduct business activities of any kind in any location. This includes establishing and operating other Cream Scoop Shops, or allowing others to do so, outside of any Protected Territory that may eventually be defined. Cream also reserves the right to establish and operate other types of businesses, even those that may offer similar or competitive products and services, under different trademarks, anywhere in the world, including within a franchisee's potential Protected Territory.
Cream can also establish other distribution channels, such as retail, wholesale, or digital sales, regardless of the location of the customers or whether these channels compete with Cream Scoop Shops. This includes selling Cream-branded products at third-party businesses. Cream also retains the right to conduct marketing and promotional activities anywhere, including within a franchisee's Protected Territory. Furthermore, Cream can be acquired by or acquire other businesses, even those that are similar to or competitive with Cream Scoop Shops, at any location, including within a Protected Territory.
In practical terms, this means that if a Cream franchisee does not have a designated Protected Territory, they face significant competition from both Cream itself and other businesses. Cream has the freedom to establish new shops, alternative distribution channels, and marketing campaigns in any location, regardless of the franchisee's proximity. This lack of territorial protection could significantly impact a franchisee's potential customer base and revenue. It is therefore crucial for prospective franchisees to ensure that a Protected Territory is clearly defined in their Franchise Agreement to mitigate these risks.