Does Cream have an obligation to operate the Brand Fund?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We will account for the Brand Fund separately from our other funds. However, neither we nor any of our affiliates has any fiduciary obligation to you or any other person for administering the Brand Fund. The Brand Fund may spend in any fiscal year more or less than the total Brand Fund Contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We may administer the Brand Fund through a separate entity whenever we deem appropriate, and such entity will have all of the rights and duties specified herein. We have the right, but no obligation, to use collection agents and institute legal proceedings to collect Brand Fund Contributions at the Brand Fund's expense. We may also forgive, waive, settle, and compromise all claims by or against the Brand Fund in our sole discretion.
We may, upon prior written notice to you, reduce or suspend Brand Fund Contributions and/or operations of the Brand Fund for one or more periods of any length and terminate (and, if terminated, reinstate) the Brand Fund and associated Brand Fund Contributions. If we terminate the Brand Fund, we will spend the remaining balance of the monies in the Brand Fund in accordance with this Section until such amounts are exhausted. We may elect to maintain multiple Brand Funds, whether determined by geographic region, country, or otherwise, or consolidate or merge multiple Brand Funds, in each case provided that each such Brand Fund will otherwise remain subject to this Section.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream does not have a fiduciary obligation to franchisees regarding the Brand Fund. While Cream establishes the Brand Fund to promote the Cream brand and Jeni's Ice Creams Scoop Shops, it is not obligated to continue its operation. Cream retains exclusive control over the Brand Fund's programs, services, and expenditures. Cream has the right to reduce or suspend Brand Fund contributions or operations, or even terminate and reinstate the Brand Fund, at its discretion, with prior written notice to the franchisee.
Cream may spend more or less than the total Brand Fund contributions in any fiscal year, borrow funds to cover deficits, or invest any surplus for future use. Cream can also administer the Brand Fund through a separate entity. Cream has the right, but not the obligation, to use collection agents and legal proceedings to collect Brand Fund Contributions at the Brand Fund's expense. Cream may also forgive, waive, settle, and compromise all claims by or against the Brand Fund in its sole discretion.
For a prospective Cream franchisee, this means that while they are required to contribute to the Brand Fund (currently 2% of net sales, but can increase to a maximum of 4%), there is no guarantee of direct benefit from the fund's expenditures. Cream has significant latitude in how the Brand Fund is managed and spent, and can even suspend or terminate it. This arrangement is typical in franchising, where franchisors maintain control over marketing and brand promotion, but it's important for franchisees to understand the potential lack of direct influence or guaranteed return on their Brand Fund contributions.