If a Cream franchisee's employee disparages the Cream brand, is the franchisee responsible?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
During and after the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns not to): (1) disparage or otherwise speak or write negatively, directly or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Jeni's® brand, the System, any Jeni's Ice Creams Scoop Shop, any business using the Marks, or any other brand concept operated, licensed, or franchised by us or our affiliates; or (2) take any other action which would, directly or indirectly, subject any of the foregoing to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System or the Marks. Notwithstanding anything to the contrary, in no event will you be prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation. In addition, nothing in this Agreement shall prohibit you from reporting a suspected violation of law to the appropriate governmental agency or authority.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees are responsible for ensuring that their employees do not disparage the Cream brand. The franchise agreement stipulates that during and after the term of the agreement, franchisees must use their best efforts to prevent their employees from speaking or writing negatively about Cream, its affiliates, directors, officers, employees, representatives, current and former franchisees, the Jeni's® brand, the System, any Jeni's Ice Creams Scoop Shop, or any other brand concept operated, licensed, or franchised by Cream or its affiliates. This responsibility extends to preventing any actions that could subject these entities to ridicule, scandal, reproach, scorn, or indignity, or that could negatively impact the goodwill of the System or the Marks.
This requirement places a significant responsibility on Cream franchisees to actively manage and monitor the behavior and communications of their employees. Franchisees must implement measures to educate their staff about the importance of upholding the brand's reputation and the potential consequences of disparaging remarks or actions. This could include training programs, clear communication policies, and disciplinary procedures for employees who violate the non-disparagement clause.
However, the non-disparagement clause does not prohibit franchisees or their employees from providing truthful testimony in legal proceedings or governmental investigations, or from reporting suspected violations of law to the appropriate governmental agency or authority. This exception ensures that franchisees and their employees can fulfill their legal and ethical obligations without fear of reprisal from Cream.
In practical terms, a Cream franchisee could be held liable for damages or other penalties if their employee makes disparaging remarks about the brand, even if the franchisee was unaware of the employee's actions. Therefore, it is crucial for prospective franchisees to understand the scope of this responsibility and to implement appropriate safeguards to protect the Cream brand's reputation.