Does the non-competition agreement for a Cream franchise apply to businesses located outside of the United States?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
to do all other lawfully permitted acts to further the purposes of this Section with the same legal force and effect as if executed by you.
7. RESTRICTIVE COVENANTS.
A. NON-COMPETITION DURING TERM.
We have granted you the rights in this Agreement in consideration of and reliance upon your agreement to deal exclusively with us. You therefore agree that, during the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, representatives, affiliates, successors and assigns not to):
- (1) have any direct or indirect interest as an owner whether of record, beneficially, or otherwise – in a Competitive Business (defined below), wherever located or operating (except that equity ownership of less than 5% of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph);
- (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating; or
- (3) divert or attempt to divert any actual or potential business or customer of any Jeni's Ice Creams Scoop Shop to a Competitive Business.
The term "Competitive Business" means any business (excluding any Jeni's Ice Creams Scoop Shop operated under a franchise agreement with us) operating or granting franchises or licenses to others to operate any business for which ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks, or similar products represents more than 10% of the total gross revenue.
B. NON-INTERFERENCE.
During and after the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors and assigns not to) solicit, interfere, or attempt to interfere with our or our affiliates' relationships with any customers, franchisees, licensees, lenders, suppliers, or consultants.
C.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the non-competition agreement applies to businesses located or operating anywhere. During the term of the agreement, the franchisee and their owners must not have any direct or indirect interest in a Competitive Business, perform services for a Competitive Business, or divert business from a Jeni's Ice Creams Scoop Shop to a Competitive Business. A Competitive Business is defined as any business (excluding Jeni's Ice Creams Scoop Shops) that generates more than 10% of its total gross revenue from ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks.
This means that Cream franchisees are restricted from involvement in competing ice cream businesses both within and outside the United States. The restriction extends to the franchisee's spouses, immediate family members, owners, officers, directors, representatives, affiliates, successors, and assigns. The only exception is owning less than 5% of a publicly traded Competitive Business on a recognized United States stock exchange.
After the termination or expiration of the franchise agreement, the franchisee is subject to a covenant not to compete for two years. This post-term non-compete applies if the Competitive Business is located within the Development Area or within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop. This post-term restriction is more limited geographically than the non-competition covenant during the term of the agreement.