What is the implication if a Cream franchisee operates under 'particular circumstances' that differ from the Item 19 Shops?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
igure to promote the franchise system.
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.
As of December 31, 2024, there were a total of 87 corporate-owned Jeni's Ice Creams Scoop Shops operating in the United States. Of the 87 corporate-owned Jeni's Ice Creams Scoop Shops, 2 opened during 2024 and were not operating for the entirety of 2024, and 2 operated on a limited seasonal basis and therefore were not operating for the entirety of 2024. The data presented in this Item 19 is based
on the remaining 83 corporate-owned Jeni's Ice Creams Scoop Shops operating in the United States for the entirety of the 2024 calendar year (the "Item 19 Shops"). We had no franchised outlets operating as of the end of our most recent fiscal year and are therefore not able to present results for franchised outlets.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 51–57)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the FTC permits Cream to provide information about the potential financial performance of its franchised or corporate-owned outlets. However, financial performance information that differs from what is included in Item 19 is allowed only under specific conditions. These conditions are that Cream provides the actual records of an existing outlet that a prospective franchisee is considering buying, or Cream supplements the information provided in Item 19 with details about performance at a particular location or under particular circumstances. This means that if a franchisee's situation differs from the standard model presented in Item 19, Cream can offer additional, relevant financial data to give a clearer picture of potential performance.
This is important for potential Cream franchisees because the standard financial performance representations in Item 19 might not always reflect the unique realities of every location or operational setup. For example, a Cream store in a high-traffic tourist area might have different revenue patterns compared to a store in a suburban residential area. Similarly, a store with a larger seating capacity or extended operating hours could see different financial results. By providing supplementary information tailored to these 'particular circumstances,' Cream aims to give franchisees a more accurate and realistic expectation of their potential earnings.
However, it is crucial for prospective franchisees to carefully evaluate any supplementary financial information provided by Cream. The FDD emphasizes that if a potential franchisee receives any financial performance information or projections of future income beyond what is in Item 19, they should report it to Cream's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This ensures transparency and helps prevent misleading or unsubstantiated claims. Franchisees should also request written substantiation for any financial performance representation to verify its accuracy and reliability. This is a common practice in franchising, as franchisors often provide detailed financial information to help potential franchisees make informed decisions, while also adhering to regulatory requirements for transparency and accuracy.