How does the Cream initial franchise fee (Item 5) compare to the potential costs associated with ongoing operational support, especially given the franchisor's assistance before opening (Item 11)?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
ITEM 5 INITIAL FEES
Initial Franchise Fee
You must pay us an initial franchise fee of $40,000 when you sign the Franchise Agreement. The initial franchise fee is payable in a lump sum and non-refundable.
Initial Inventory
You must purchase your initial inventory of Proprietary Products and certain other inventory and supplies (including toppings, branded merchandise, gift cards, uniforms, and certain décor and decals) from Parent before you open your Shop. We estimate that the cost of these purchases from Parent prior to opening your Shop will range from $16,000 to $21,000. The cost of these purchases will depend on the size and specifications of your Shop, the cost of taxes and shipping in your area, the quantity of Proprietary Products you order, and similar market conditions. The cost of Proprietary Products you purchase from Parent is payable on placing each order and is non-refundable.
Gift Card Set-Up Fee
You must pay us an initial gift card set-up fee of $149 prior to opening your Shop. The gift card setup fee is payable in lump sum and is non-refundable.
Development Fee
If you are signing an Area Development Agreement, you must pay a development fee when you sign the Area Development Agreement (the "Development Fee"). The Development Fee will be: (i) $105,000 for three Jeni's Ice Creams Scoop Shops; (ii) $140,000 for four Jeni's Ice Creams Scoop Shops; and (iii) $150,000 for five Jeni's Ice Creams Scoop Shops. The Development Fee will be paid in lieu of the Initial Franchise Fee due for the Jeni's Ice Creams Scoop Shops that you develop pursuant to the Development Schedule, which would otherwise be owed pursuant to each applicable Franchise Agreement. The Development Fee is payable in lump sum and is non-refundable.
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]
On-Site Opening Support. If you are developing your first Jeni's Ice Creams Scoop Shop, we will send one or more of our representatives to your Shop to assist you with your Shop's grand opening for 5 days at no additional cost to you. We will determine the identity and quantity of the representative(s) we send to your Shop and the schedule for all such on-site opening support in our discretion (which may be before and/or after your Opening Date). If we determine that you need more than 5 days of opening support to bring your Shop into compliance with System Standards, and/or you request more than 5 days of opening support and we agree to provide it, you must pay our then-current additional training fee (currently, $500 per trainer per day, plus reimbursement of our costs and expenses). If we determine that you need on-site opening support for your second or subsequent Jeni's Ice Creams Scoop Shop to satisfy the System Standards, and/or you request and we agree to provide such on-site support for your second or subsequent Jeni's Ice Creams Scoop Shop, you must pay our then-current additional training fee (currently, $500 per trainer per day, plus reimbursement of our costs and expenses).
What This Means (2025 FDD)
According to the 2025 FDD, Cream's initial franchise fee is $40,000. This fee grants the franchisee the right to operate a Cream shop and is non-refundable. In addition to this fee, Cream franchisees must purchase initial inventory from Parent, estimated to cost between $16,000 and $21,000, and pay a $149 gift card set-up fee.
Cream provides some initial support to new franchisees. For the first shop a franchisee develops, Cream offers an initial training program for up to three attendees at no cost, though the franchisee is responsible for travel, lodging, meals, and wages for the trainees. Cream also provides on-site opening support for five days at no additional cost for the first shop. However, if Cream determines that more than 5 days of opening support is needed to meet System Standards, or if the franchisee requests additional support beyond the initial five days and Cream agrees to provide it, the franchisee must pay a training fee. This fee is currently $500 per trainer per day, plus reimbursement of costs and expenses.
The cost of additional support can quickly add up. For example, if Cream determines that a franchisee needs an additional 5 days of support from two trainers, the franchisee would incur a cost of $5,000 (5 days x 2 trainers x $500/day) plus the trainers' expenses. This is a significant expense to consider in addition to the initial franchise fee and other start-up costs. Franchisees should carefully assess their operational capabilities and the likelihood of needing additional support to avoid these extra costs.
While the initial franchise fee is a fixed cost, the expenses associated with ongoing operational support, particularly if the franchisee requires more than the standard assistance, can vary significantly. Franchisees should discuss with Cream under what circumstances additional support days are required and what the typical expenses are for the Cream trainers to better understand potential costs beyond the initial franchise fee.