What obligation does Cream have to provide accurate financial performance information?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
igure to promote the franchise system.
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.
As of December 31, 2024, there were a total of 87 corporate-owned Jeni's Ice Creams Scoop Shops operating in the United States. Of the 87 corporate-owned Jeni's Ice Creams Scoop Shops, 2 opened during 2024 and were not operating for the entirety of 2024, and 2 operated on a limited seasonal basis and therefore were not operating for the entirety of 2024. The data presented in this Item 19 is based
on the remaining 83 corporate-owned Jeni's Ice Creams Scoop Shops operating in the United States for the entirety of the 2024 calendar year (the "Item 19 Shops"). We had no franchised outlets operating as of the end of our most recent fiscal year and are therefore not able to present results for franchised outlets.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 51–57)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the FTC's Franchise Rule mandates that if a franchisor, such as Cream, chooses to provide financial performance information, it must have a reasonable basis for that information and include it in the disclosure document. This rule aims to ensure that prospective franchisees receive reliable and substantiated data to evaluate the potential financial outcomes of investing in a Cream franchise.
Cream is permitted to offer financial performance information that differs from what is included in Item 19 of the FDD only under specific conditions. These conditions include providing the actual records of an existing Cream outlet that the prospective franchisee is considering purchasing, or supplementing the information in Item 19 with additional details about performance at a specific location or under particular circumstances. This ensures that any deviations from the standard financial performance representations are transparent and well-documented.
The FDD also states that other than the financial performance representation provided in Item 19, Cream does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. Cream also does not authorize its employees or representatives to make such representations, either orally or in writing. However, if a prospective franchisee receives any financial performance information or projections of future income from other sources, they are instructed to report it to Cream's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This measure is in place to maintain the integrity of the financial information provided to potential franchisees and to address any unauthorized or misleading claims.