If Cream chooses to purchase the franchisee's business, what assets are included in the purchase?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
, and related agreements. You should read these provisions in the agreements attached to this Disclosure Document.**
| Provision | Agreement | Summary |
|---|---|---|
| of first refusal, or there is a material change in terms, we will have an additional right of first refusal. | ||
| (o) Franchisor’s | Franchise Agreement | We may purchase any or all of the assets of your Shop (including |
| option to | – Section 15.D | the Premises, if it is owned by you or one of your owners or |
| purchase | affiliates) upon the termination or expiration of the Franchise | |
| franchisee’s | Agreement. The purchase price will be based upon the net | |
| business | realizable value of the tangible assets in accordance with the liquidation basis of accounting. We may exercise this right by giving you written notice of our election within 30 days after the termination or expiration. If challenged, the purchase price will be determined by an appraiser designated by us, with costs and fees shared equally by both parties. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream has the option to purchase the assets of a franchisee's shop upon termination or expiration of the Franchise Agreement. The assets Cream may purchase include all assets of the shop, and the premises if the franchisee or their affiliates own it.
The purchase price for these assets will be based on the net realizable value of the tangible assets, determined using the liquidation basis of accounting. Cream can exercise this right by providing written notice within 30 days after the termination or expiration of the agreement.
If the purchase price is disputed, an appraiser designated by Cream will determine the price, with the costs and fees shared equally between Cream and the franchisee. While the decision to purchase the shop is pending, Cream may operate the shop on an interim basis, as outlined in the Franchise Agreement. This clause ensures that Cream has a mechanism to maintain control over the location and brand, while providing the franchisee with compensation for their tangible assets.