What is the maximum time allowed to transfer the Cream franchise interest after the death or disability of the franchisee?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the death or disability of you (or if you are conducting business as an Entity, any of your owners), such person's executor, administrator, conservator, guardian, or other personal representative must transfer such person's interest in this Agreement, your Shop, or ownership interest in you, to a third party that we approve (which may be such person's heirs, beneficiaries, or devisees). That transfer must be completed within a reasonable time, not to exceed 180 days from the date of death or disability, and is subject to all of the terms and conditions in this Section 12, except that any transferee that is the spouse or immediate family member of the deceased will not have to pay the transfer fee described in Section 12.C(10) if the transfer meets all the other conditions in Section 12.C, and the transferee reimburses us for any costs we incur in connection with documenting and otherwise processing such transfer, including reasonable attorneys' fees. The term "disability" means a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent such person from fulfilling such person's respective duties under this Agreement, as applicable. In the event of the death or disability of you (if you are conducting business as an individual) or your Principal Owner (if you are conducting business as an Entity), if your Shop is not otherwise being managed by a Shopkeeper, you or your Principal Owner's (as applicable) person's executor, administrator, conservator, guardian, or other personal representative must within a reasonable time, not to exceed 15 days from the date of death or disability, appoint a Shopkeeper who we approve and who has completed our then-current Initial Training Program to supervise the day-to-day operations of your Shop. If your Shop is not being managed properly at any time from and after the death or disability of you (if you
are conducting business as an individual) or your Principal Owner (if you are conducting business as an Entity), in our sole judgment, we may, but need not, operate the Shop on an interim basis (or appoint a third party to operate the Shop on an interim basis) in accordance with Section 14.D.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, in the event of the death or disability of the franchisee (or any owners of an entity franchisee), their representative has a reasonable time, not exceeding 180 days from the date of death or disability, to transfer the franchise interest. This transfer is subject to Cream's approval and all other terms and conditions outlined in Section 12 of the franchise agreement.
This 180-day period provides some leeway for the deceased or disabled franchisee's estate to settle affairs and find a suitable, approved buyer. However, the representative must also appoint an approved Shopkeeper within 15 days of the death or disability to manage the day-to-day operations if one is not already in place. This Shopkeeper must have completed Cream's initial training program.
It's important to note that even with the 180-day window, Cream retains significant control over the transfer process. They must approve the transferee, and the transferee may need to sign Cream's current franchise agreement, which could have terms that differ from the original agreement. The estate will also be responsible for Cream's costs associated with documenting and processing the transfer.
For a prospective Cream franchisee, this clause highlights the importance of succession planning. Franchisees should consider how their business would be managed and transferred in the event of death or disability, and discuss these plans with Cream to ensure a smooth transition. Having a plan in place can help protect the value of the franchise and ensure the continued operation of the Cream shop.