If transferring any beneficial or ownership interest in a Cream franchise, what must the transferee(s) sign?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) the transferee must (if the transfer is of this Agreement or your Shop), sign our then-current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, including the Royalty and the Brand Fund Contribution; provided, that the term of the new franchise agreement signed will equal the then-remaining Term;
- (9) the transferee(s) must (if the transfer is any beneficial or ownership interest in you) (i) sign our then-current form of guaranty undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us, and (ii) provide us with an updated Attachment A;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee is transferring any beneficial or ownership interest in their franchise, the transferee(s) must sign Cream's then-current form of guaranty. This guaranty undertakes that the transferee(s) will be personally bound, jointly and severally, by all provisions of the Franchise Agreement and any ancillary agreements between the franchisee and Cream. Additionally, the transferee(s) must provide Cream with an updated Attachment A.
This requirement ensures that Cream maintains a consistent level of control and protection, even when the ownership of a franchise changes hands. By requiring a guaranty, Cream ensures that the new beneficial or ownership interest holders are fully accountable for the franchise's obligations. The updated Attachment A likely provides current information about the ownership structure, ensuring Cream has accurate records.
For a prospective Cream franchisee, this means that if they plan to transfer any portion of their ownership, the individuals or entities acquiring that interest will need to commit to the same obligations as the original franchisee. This could impact the attractiveness of the franchise to potential buyers, as they will be taking on significant personal liability. Franchisees should carefully consider these implications when planning for potential transfers of ownership.