If a Cream developer or owner is convicted of a felony, can Cream terminate the agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
C. BY US.
We may terminate this Agreement, effective upon delivery of written notice to you, if:
- (3) you or any of your owners are or have been convicted of or have pleaded no contest or guilty to a felony;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream has the right to terminate the agreement with a developer if the developer or any of its owners has been convicted of a felony, or has pleaded no contest or guilty to a felony. Cream can enact this termination effective immediately upon delivering written notice to the developer. This applies both to the Development Agreement and the Franchise Agreement.
This clause is fairly standard in franchising, as franchisors want to protect their brand's reputation and avoid being associated with individuals who have committed serious crimes. The inclusion of a "no contest" or guilty plea broadens the scope, allowing Cream to terminate the agreement even if there is no formal conviction.
For a prospective Cream developer, this means that a past or future felony conviction (or plea) could lead to the termination of their agreement. It is important to note that this clause applies not only to the developer but also to any of their owners. This could have significant implications for the ownership structure of the development entity and the background checks Cream might conduct.