How many non-compliance events within a 12-month period can trigger a breach of the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) you (or any of your owners) (a) fail on three or more separate occasions within any 12 consecutive month period to comply with this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you; or (b) fail on two or more separate occasions within any 12 consecutive month period to comply with the same obligation under this Agreement, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a franchisee can be in breach of their franchise agreement if they fail to comply with the agreement on multiple occasions within a 12-month period. Specifically, if a franchisee fails to comply with the agreement on three or more separate occasions within any 12 consecutive month period, it can be considered a breach, regardless of whether Cream notifies the franchisee of these failures or whether the franchisee corrects the failures after notification.
Additionally, a breach can occur if a franchisee fails to comply with the same obligation under the agreement on two or more separate occasions within any 12 consecutive month period. Similar to the previous condition, this applies whether or not Cream notifies the franchisee of the failures and whether or not the franchisee corrects the failures after being notified.
These stipulations highlight the importance of strict adherence to the franchise agreement. Even if the franchisee isn't notified or corrects the issue after notification, multiple failures to comply, especially repeated failures regarding the same obligation, can lead to a breach of contract and potential termination of the Cream franchise agreement.