To whom do I pay the lease and utility security deposits for a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise Agreement)
| Type of Expenditure | Amount | Method of Payment 1 | When Due | To Whom Payment is Made | |
|---|---|---|---|---|---|
| Low | |||||
| Initial Franchise Fee | $40,000 | $40,000 | Lump sum | Upon signing Franchise Agreement | Us |
| Real Estate (3 Months’ | $18,000 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, lease and utility security deposits are paid to unaffiliated third parties such as utility companies or the landlord. These deposits are estimated to range from $6,000 to $20,000. The actual amount will be arranged between the franchisee and the third parties and will be due as arranged. Cream does not specify the exact amount, as it depends on factors like the lease agreement and utility requirements.
Security deposits for leases are typically required by landlords to cover potential damages or unpaid rent. Similarly, utility companies often require security deposits to ensure payment for services. The FDD notes that the lease security deposit is estimated to be equal to one month's rent. These deposits are held by the landlord or utility company and are usually refundable to the franchisee at the end of the lease term or service period, provided all obligations have been met.
Prospective Cream franchisees should carefully review their lease agreements and utility contracts to understand the specific deposit requirements. It is also advisable to budget for the higher end of the estimated range ($20,000) to account for potential variations in deposit amounts. Understanding these payment details is crucial for managing the initial investment and ensuring smooth operations.