After notifying the franchisee of its election to purchase, how much additional time does Cream have to prepare for closing?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We may elect to purchase the interest offered for the price and on the terms and conditions contained in the offer, provided that: (1) we notify you or your selling owner(s) that we intend to purchase the interest within 60 days after we receive a copy of the offer and all other information we request; (2) we may substitute cash for any form of payment proposed in the offer (such as ownership interests in a privately-held entity); (3) we or our designee will be offered the same terms for any promissory notes or other deferred payments as those offered by the proposed buyer; (4) we will have an additional 90 days to prepare for closing after notifying you of our election to purchase; and (5) we must receive, and you and your owners agree to make, all customary representations and warranties given by the seller of the assets of a business or the ownership interests in any legal business entity.
We have the unrestricted right to assign any or all of our rights under this Section 12.F to a third party who then will have the rights described herein. If we do not exercise our right of first refusal, you or your owners may complete the sale to the proposed buyer on the original offer's terms, but only
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their interest in the franchise, Cream has a right of first refusal. If Cream elects to purchase the franchisee's interest, it has an additional 90 days to prepare for closing after notifying the franchisee of its intent to purchase.
This 90-day period allows Cream adequate time to organize the necessary resources and complete the acquisition. This includes securing financing, conducting due diligence, and preparing legal documentation. For a franchisee looking to sell, this means they should anticipate a waiting period of at least 60 days for Cream to decide, and potentially another 90 days for the closing process if Cream exercises its right.
It is important to note that Cream can assign its right of first refusal to a third party, who would then have the same rights. Additionally, the terms of the sale must include customary representations and warranties from the seller. This clause ensures that Cream (or its assignee) has sufficient time to finalize the purchase and protects their interests during the transition.