What happens if the transferee or its owners have an ownership interest in a Competitive Business when transferring a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We will approve a transfer if all of the following requirements are met:
- (1) you submit an application in writing requesting our consent and providing us all information or documents we request about the transferee and its owners that we request to evaluate their ability to satisfy their respective obligations under our then-current form of Franchise Agreement and any documents ancillary thereto, and each such person must have completed and satisfied all of our application and certification requirements, including the criteria that neither the transferee nor its owners (if the transferee is an Entity) or affiliates have an ownership interest in or perform services for a Competitive Business;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if the transferee or its owners have an ownership interest in a Competitive Business, the transfer of the Cream franchise may not be approved. Cream requires that neither the transferee nor its owners (if the transferee is an entity) or affiliates have an ownership interest in or perform services for a Competitive Business as part of the application and certification requirements for transfer approval.
A "Competitive Business" is defined as any business (excluding any Jeni's Ice Creams Scoop Shop operated under a franchise agreement with Cream) that operates or grants franchises or licenses to others to operate a business where ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks, or similar products represent more than 10% of the total gross revenue.
This condition ensures that the transferee is fully committed to the Cream franchise and does not have conflicting interests that could negatively impact the operation of the Cream business. It is a fairly standard practice in franchising to prevent conflicts of interest and protect the brand's competitive position.