What is Cream's obligation if a System Standard is deemed unlawful?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires or some other action that this Agreement does not require, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any System Standard is invalid, unenforceable, or unlawful, the notice or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and we may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. You agree to be bound by any promise or covenant imposing the maximum duty the law permits which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if any System Standard is deemed invalid, unenforceable, or unlawful due to an applicable and binding law or rule in any jurisdiction, the requirements of that law or rule will take precedence over the comparable provisions in the Franchise Agreement. Cream has the right to modify the System Standard to the extent necessary to make it valid and enforceable or to remove the unlawful provision entirely. The franchisee agrees to adhere to the maximum duty permitted by law, as if it were explicitly stated in the agreement. This ensures that the franchise agreement remains compliant with local laws and regulations.
This clause protects both Cream and the franchisee by ensuring that the franchise operates within the bounds of the law. It also allows Cream to adapt its System Standards to comply with varying legal requirements across different jurisdictions. For a prospective franchisee, this means that the System Standards they initially agree to may be subject to change based on local laws.
It is important for franchisees to stay informed about any changes to System Standards and to understand how local laws may affect their franchise operations. Franchisees should seek legal counsel to understand their rights and obligations under the franchise agreement and to ensure compliance with all applicable laws and regulations. This adaptability is a common practice in franchising, allowing franchisors to maintain consistency while respecting local legal requirements.