Does the non-disparagement clause in the Cream franchise agreement extend to former franchisees?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
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) disparage or otherwise speak or write negatively, directly or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees or developers of us or our affiliates, the Jeni's ® brand, the System, any Jeni's Ice Creams Scoop Shop, any other brand or service-marked or trademarked concept operated or franchised by us or our affiliates, or take any other action which would, directly or indirectly, subject any of the foregoing to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System. Notwithstanding anything to the contrary, in no event will you be prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation. In addition, nothing in this Agreement shall prohibit you from reporting a suspected violation of law to the appropriate governmental agency or authority.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the non-disparagement clause in the Cream franchise agreement extends to both current and former franchisees. During and after the term of the agreement, franchisees and their owners must not disparage Cream, its affiliates, or its current and former franchisees. This obligation also extends to the franchisee's current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns.
This means that even after a Cream franchise agreement expires or is terminated, the franchisee remains bound by the non-disparagement clause. This restriction aims to protect Cream's brand reputation and goodwill. However, the agreement specifies that franchisees are not prohibited from providing truthful testimony in legal proceedings or reporting suspected violations of law to governmental agencies.
The non-disparagement clause is a common feature in franchise agreements, designed to prevent franchisees from making negative statements that could harm the brand. Prospective Cream franchisees should understand that this obligation continues even after they are no longer part of the franchise system. This could limit their ability to publicly criticize the franchise, even if they have legitimate concerns.