What kind of release must the franchisee and its owners agree to when Cream purchases the Shop?

According to Cream's 2025 Franchise Disclosure Document, when transferring ownership of a Cream shop, the franchisee and their owners must sign a release of claims against Cream and its affiliates. Specifically, they must sign all documents Cream requires, including a release of any and all claims (except those that cannot be released or waived under applicable law) against Cream, its affiliates, and their respective owners, officers, directors, employees, and agents. They must also agree to satisfy all post-termination obligations.

This requirement means that as part of the transfer process, franchisees give up their right to sue Cream for any past issues, with the exception of claims protected by franchise law. This is a standard practice in franchising, as it ensures Cream is free from potential future liabilities related to the franchisee's operation of the shop. The release helps Cream maintain consistent standards and practices across all franchise locations without the risk of legal disputes arising from prior ownership.

For a prospective Cream franchisee, this condition highlights the importance of operating the franchise in full compliance with the franchise agreement. Any unresolved issues or disputes with Cream could become non-actionable upon transfer of the franchise. Franchisees should seek legal counsel to fully understand the implications of such a release and ensure they are comfortable with the terms before signing. This also underscores the need for thorough due diligence when considering the purchase of an existing Cream franchise, as the buyer will be stepping into a business relationship where previous claims against the franchisor have been waived.