What happens if a Cream Shopkeeper has a competitive business?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
to the Franchise Agreement. You must obtain our written consent prior to changing the Principal Owner.
You are solely responsible for the management, direction and control of your Shop and all day-to-day operations of your Shop. You must supervise the management and day-to-day operation of your Shop and continuously exert best efforts to promote and enhance your Shop. If you (or your Principal Owner) does not wish to manage the operation of your Shop on a day-to-day basis, you must obtain our approval of any person that you wish to engage to supervise the management of your Shop (each a "Shopkeeper"). We may establish conditions for approving any such Shopkeeper, which may include the completion of training, confirmation that such Shopkeeper will have no competitive business, and/or execution of a non-disclosure agreement. During any period in which no Shopkeeper is approved (including because the Shopkeeper resigns or otherwise indicates to us or you that he or she wishes to cease acting as your Shopkeeper, or we disapprove of your Shopkeeper for any reason), you (or your Principal Owner) must supervise the day-to-day operations of your Shop. Your Shop must always be under the direct on-site supervision of one or more persons who we have approved and who
have completed the Initial Training Program to our satisfaction. Each Jeni's Ice Creams Scoop Shop must have a separate Shopkeeper.
If you are a legal business entity, each of your direct and indirect owners with a 10% or greater ownership interest in you must execute a guaranty in the form personally to be bound, jointly and severally, by all provisions of the Franchise Agreement and any ancillary agreements between you and us. Our current form of guaranty is attached as Attachment D to the Franchise Agreement. If any owner is an individual, his or her spouse must consent in writing to that owner's execution of the guaranty.
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
Products and Services
You must: (i) offer and sell from your Shop all of the products and services that we specify; (ii) not offer or sell at your Shop, the Premises, or any other location any products or services we have not authorized; and (iii) discontinue selling and offering for sale any products or services that we at any time disapprove. You will offer for sale and sell at your Shop authorized products and services only in the manner (including days and hours of operation) and at the locations we have prescribed. We may authorize one or more Jeni's Ice Creams Scoop Shops to offer additional, different, or modified attractions, products, or services, and we are under no obligation to authorize every Jeni's Ice Creams Scoop Shop to offer the same products or services. We may condition our approval for any such products or services on our then-current criteria, and/or additional terms and conditions that we establish.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 42–43)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee (or their Principal Owner) does not manage the day-to-day operations of their Cream shop, they must get Cream's approval for a Shopkeeper to supervise the management. Cream may set conditions for approving a Shopkeeper, including confirming that the Shopkeeper does not have a competitive business.
If a Shopkeeper is not approved, including if Cream disapproves of the Shopkeeper for any reason, the franchisee (or Principal Owner) must supervise the daily operations of the shop. Cream stipulates that each Cream shop must always be under the direct, on-site supervision of someone Cream has approved and who has completed the initial training program.
During the term of the Franchise Agreement, Cream franchisees and their owners agree not to have any direct or indirect interest in a Competitive Business, perform services for a Competitive Business, or divert business from a Cream shop to a Competitive Business. A Competitive Business is defined as any business (excluding another Cream franchise) that operates or grants franchises for businesses where ice cream, ice cream-based desserts/drinks, and/or other frozen desserts/drinks make up more than 10% of the total gross revenue. However, owning less than 5% of a publicly traded Competitive Business is permitted.