What happens if a Cream tenant defaults on obligations under the lease and franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
e provided, at Tenant's sole cost and expense, with a panel on any pylon/monument/directory sign for the development in which the Premises is located and will be permitted to install a standard sign thereon approved by Franchisor, including, without limitation, Franchisor's logo. Landlord hereby grants and approves Tenant the right to display the Marks at the Premises, subject only to the provisions of applicable law.
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- Notice and Cure Rights to Franchisor. Prior to exercising any remedies hereunder (except in the event of imminent danger to the Premises), Landlord will give Franchisor written notice of any default by Tenant, and commencing on receipt thereof by Franchisor, Franchisor will have
fifteen (15) additional days to the established cure period as is given to Tenant under the Lease for such default to cure such defaults. Landlord agrees to accept cure tendered by Franchisor as if the same was tendered by Tenant, but Franchisor has no obligation to cure such default. The initial address for notices to Franchisor is as follows: Jeni's Splendid Ice Creams Franchise, LLC, 401 North Front Street, Suite 300, Columbus, Ohio 43215, Attention: Legal Department, or such other address as Franchisor provides to Landlord.
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- Non-Disturbance from Mortgage Lenders. It will be a condition of the Lease being subordinated to any mortgage, deed of trust, deed to secure debt, or similar encumbrance on the Premises that the holder of such encumbrance agree not to disturb Tenant's rights under this Lease or Tenant's possession of the Premises, so long as Tenant is not in default of its obligations under the Lease and the Franchise Agreement, beyond an applicable grace or cure period.
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- Fixtures and Signage. Any lien of Landlord in Tenant's trade fixtures, 'trade dress,' signage, and other property at the Premises is hereby subordinated to Franchisor's interest in such items as described in the Franchise Agreement. On request, Landlord will grant the party who owns such property reasonable access to the Premises for the sole purpose of removing such property, provided such party repairs any damage caused by such removal and otherwise complies with Landlord's reasonable requirements with respect to such access.
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- Third-Party Beneficiary. Franchisor is a third-party beneficiary of the terms of this Rider, or any other terms of the Lease applicable to Franchisor's rights under the Lease, and as a result thereof, will have all rights (but not the obligation) to enforce the same.
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- Franchisor Right to Enter.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a Cream franchisee (referred to as 'Tenant' in the lease agreement excerpts) defaults on their lease obligations, the landlord must provide written notice to Cream, giving Cream an additional fifteen days beyond the franchisee's cure period to address the default. The landlord is obligated to accept a cure tendered by Cream as if it were tendered by the franchisee, although Cream is not obligated to cure the default. This arrangement ensures Cream has an opportunity to rectify the situation and protect its brand and the franchise location.
Furthermore, the FDD stipulates that the lease can be collaterally assigned to Cream to secure the franchisee's obligations under the Franchise Agreement. This means that in the event of a default, Cream has the right to succeed to the franchisee's interest in the lease. Cream also has the right to assign the lease to another franchisee. This provides Cream with options to maintain the operation of the Cream shop, either by taking over the lease directly or transferring it to a new franchisee.
The FDD also states that Cream, or its designee, has the right to enter the premises for purposes permitted under the Franchise Agreement. These purposes include inspecting the premises, managing the franchisee's business if they fail to cure a default, or removing trade fixtures and signage upon termination or expiration of the Franchise Agreement. However, it is clarified that Cream does not assume any liability under the lease by entering the premises for these purposes. This clause protects Cream from being held responsible for the franchisee's lease obligations simply by exercising its rights to oversee or manage the franchise.
Finally, the landlord agrees not to take any action that would prohibit the franchisee from operating the Jeni's Ice Creams Scoop Shop, as contemplated by the Franchise Agreement, at the premises. Additionally, any landlord liens on the tenant's trade fixtures, trade dress, signage, and other property at the premises are subordinated to Cream's interest in such items as described in the Franchise Agreement. This ensures that Cream's brand assets and operational capabilities are protected, even in the event of a franchisee default.