What happens with the Cream Shop's licenses and permits if Cream purchases the Shop?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Closing of the purchase will take place, as described below, on a date we select which is within 90 days after determination of the purchase price in accordance with this Section 15.D, although we or our designee may decide after the purchase price is determined not to purchase your Shop and/or the Premises. At the closing, you agree to deliver to us or our designee: (1) an asset purchase agreement and other agreements in the form we dictate, which provide customary warranties and representations, including representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities affecting the assets, contingent or otherwise; (2) good and merchantable title to the assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with all taxes paid by you, including sales, goods and services, harmonized sales, use, value added, retailer's excise, or similar taxes; (3) any and all of your Shop's licenses and permits which may be assigned or transferred; (4) the ownership interest or leasehold interest (as applicable, if we determine) in the Premises and improvements or a lease assignment or lease or sublease, as applicable; and (5) an agreement, in form and substance satisfactory to us, voluntarily terminating this Agreement, under which you agree to
comply with all post-term obligations under this Agreement, and that you and your owners agree to a general release of any and all claims (except for claims which cannot be released or waived pursuant to an applicable franchise statute) against us and our owners, affiliates, officers, directors, employees, agents, successors, and assigns. If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, we and you will close the sale through an escrow.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if Cream or its designee purchases a Cream shop, the franchisee must deliver several items at the closing of the purchase. Among these items are "any and all of your Shop's licenses and permits which may be assigned or transferred".
This means that as part of the sale, the franchisee is obligated to transfer all assignable licenses and permits to Cream. This ensures that Cream can continue operating the shop without interruption, provided the licenses and permits are transferable.
However, the FDD also indicates that if the franchisee cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the sale will close through an escrow account. This suggests a process to handle situations where licenses or permits cannot be directly transferred, ensuring the transaction can still proceed with appropriate safeguards.