Does Cream have to notify a franchisee of failures to comply with the agreement before terminating the agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
deficiencies, we may revoke any approval of such a renewal franchise we may have awarded. If you fail to notify us of your election to acquire a renewal franchise within the prescribed time period, we need not grant you a renewal franchise.
14. TERMINATION OF AGREEMENT.
A. AUTOMATIC.
This Agreement and all rights granted to you in this Agreement shall automatically terminate without notice if: (1) you make an assignment for the benefit of creditors; (2) you consent to the appointment of a receiver, trustee, or liquidator of all or the substantial part of your property; (3) your Shop is attached, seized, subjected to a writ or distress warrant, or levied upon, unless the attachment, seizure, writ, warrant, or levy is vacated within 30 days; (4) any order appointing a receiver, trustee, or liquidator of you or your Shop is not vacated within 30 days following the order's entry; and/or (5) you or any of your owners file a petition in bankruptcy or a petition in bankruptcy is filed against you.
B. BY YOU.
If you and your owners are fully complying with this Agreement and we materially fail to comply with this Agreement and do not correct the failure within 30 days after you deliver written notice of the material failure to us or if we cannot correct the failure within 30 days and we fail to give you within 30 days after your notice reasonable evidence of our effort to correct the failure within a reasonable time, you may terminate this Agreement effective an additional 30 days after you deliver to us written notice of termination. Your termination of this Agreement other than according to this Section 14.B will be deemed a termination without cause and a breach of this Agreement.
C. BY US.
We may terminate this Agreement, effective upon delivery of written notice to you, if:
(1) you or any of your owners have made or make any material misrepresentation or omission in acquiring the rights under this Agreement or in operating your Shop;
- (2) you do not obtain lawful possession of a Premises we have approved and deliver to us a fully executed copy of the Lease and lease addendum we have approved for such Premises, in each case by the deadline set forth in Section 2.B;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream is not always required to provide notice to a franchisee before terminating the franchise agreement. In some instances, the agreement can be automatically terminated without notice.
For example, the franchise agreement with Cream can be terminated without notice if the franchisee makes an assignment for the benefit of creditors, consents to the appointment of a receiver, trustee, or liquidator, or if a Jeni's Ice Creams Scoop Shop operated under a Franchise Agreement is attached, seized, or levied upon and not vacated within 30 days. Similarly, filing for bankruptcy can also trigger automatic termination.
However, in other cases, Cream is required to provide notice and an opportunity to correct the failure before terminating the agreement. For instance, if a franchisee violates any law related to their Development Rights, they have 72 hours after notice to correct the violation. If the franchisee fails to pay amounts due, they have 10 days after written notice to correct the failure. For other breaches of the agreement, the franchisee typically has 30 days after notice to correct the issue. However, if a franchisee fails to comply with the agreement on three or more separate occasions within a 12-month period, Cream may not be required to provide notice of the failures.