What is the minimum ownership interest a Principal Owner must have in a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You must identify one of your owners who is a natural person with at least 10% ownership interest and voting power in you and who will have authority and signatory power on your behalf (the "Principal Owner") to supervise the business you conduct under the Franchise Agreement. Your Principal Owner must be authorized to deal with us in all matters whatsoever which may arise with respect to the Franchise Agreement. You must obtain our written consent prior to changing the Principal Owner.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 42–43)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if the franchisee is a legal entity, at least one owner must be designated as the Principal Owner. This Principal Owner is required to have a minimum ownership interest of 10% in the franchise entity.
This requirement ensures that someone with a significant stake in the business is actively involved and responsible for its operations. The Principal Owner must also have the authority to act on behalf of the franchise and deal with Cream on all matters related to the Franchise Agreement.
Furthermore, Cream must approve any changes to the Principal Owner, giving them control over who is managing the franchise. This stipulation is in place to ensure that Cream has confidence in the individual overseeing the operations and that the person is adequately trained and committed to the brand's standards. This is a fairly standard practice in franchising, as franchisors want to ensure that franchisees are actively managed by competent individuals with a vested interest in the business's success.