If a person restricted by Section 7 fails to comply with their obligations upon termination or expiration of the Cream Area Development Agreement, when does the two-year restricted period commence?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If any person restricted by this Section fails to comply with these obligations as of the date of termination or expiration, the two-year restricted period for that person will commence on the date the person begins to comply with this Section, which may be the date a court order is entered enforcing
this provision. You and your owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting these skills. Consequently, our enforcing the covenants made in this Section will not deprive you of your personal goodwill or ability to earn a living. The restrictions in this Section will also apply after any transfer, to the transferor and its owners, for a period of two years beginning on the effective date of the transfer, with the force and effect as though this Agreement had been terminated for such parties as of such date.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if someone bound by the non-compete obligations fails to comply with them upon termination or expiration of the Area Development Agreement, the two-year restricted period doesn't start immediately. Instead, the two-year period begins on the date that person starts to comply with the restrictions.
This means that Cream franchisees or their owners can't simply ignore the non-compete agreement and have the clock run out. The restriction only kicks in when they cease the prohibited activity. This could be the date a court orders them to comply, which effectively enforces the provision.
Cream emphasizes that franchisees possess general skills and opportunities, so enforcing these non-compete terms won't deprive them of their ability to earn a living or impact their personal goodwill. The restrictions also apply to anyone who transfers the agreement, starting from the transfer date, as if the agreement was terminated for them on that date.