What are the potential consequences for a Cream franchisee who fails to adhere to system standards (Item 8), considering the franchisor's trademarks (Item 13)?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You must comply with all of the mandatory standards, specifications, operating procedures, and rules that we prescribe from time to time for operating a Jeni's Ice Creams Scoop Shop ("System Standards").
Our parent is Jeni's Splendid Ice Creams, LLC ("Parent"). Parent owns the Jeni's® trademark and other trademarks, service marks, logos, and commercial symbols we periodically authorize (the "Marks") and licenses the Marks and other intellectual property rights to us for use by our franchisees.
You agree at all times to operate and maintain your Shop according to each and every System Standard, as we periodically modify and supplement them. Though we retain the right to establish and periodically modify System Standards, you retain the sole responsibility for the day-to-day management and operation of your Shop and the implementation and maintenance of System Standards at your Shop. System Standards may regulate any aspect of the operation and maintenance of your Shop, including any one or more of the following:
We and you will not waive or impair any right, power, or option this Agreement reserves (including our right to demand exact compliance with every term, condition, and covenant or to declare any breach to be a default and to terminate this Agreement before the Term expires) because of any custom or practice at variance with this Agreement's terms; our or your failure, refusal, or neglect to exercise any right under this Agreement or to insist upon the other's compliance with this Agreement, including any System Standard; our waiver of or failure to exercise any right, power, or option, whether of the same, similar, or different nature, with other Jeni's Ice Creams Scoop Shops; the existence of franchise agreements for other Jeni's Ice Creams Scoop Shops which contain provisions different from those contained in this Agreement; or our acceptance of any payments due from you after any breach of this Agreement.
Upon termination or expiration of this Agreement you and your owners must immediately: (1) cease conducting the business granted hereunder or holding yourself out to the public as being a developer of Jeni's Ice Creams Scoop Shops except as permitted under Franchise Agreements
What This Means (2025 FDD)
According to the 2025 FDD, Cream franchisees must adhere to the System Standards set by the franchisor, which may regulate any aspect of the shop's operation and maintenance. These standards cover a wide array of elements, including required fixtures, furniture, equipment, computer systems, furnishings, signs, inventory, products, materials, and services used in the Jeni's Ice Creams Scoop Shops. Cream may require franchisees to purchase and use only products and services that meet these System Standards, potentially from designated or approved suppliers.
Failure to comply with System Standards can lead to several consequences. Cream retains the right to demand exact compliance with every term, condition, and covenant, and can declare any breach to be a default, potentially leading to the termination of the Franchise Agreement. However, Cream may also unilaterally waive or reduce any obligation or restriction under the agreement by providing written notice, though such waivers are subject to continuing review and can be revoked with 10 days' prior written notice.
Furthermore, the parent company, Jeni's Splendid Ice Creams, LLC, owns the Jeni's® trademark and other trademarks, service marks, logos, and commercial symbols, licensing them to the franchisor for use by franchisees. This underscores the importance of maintaining System Standards to protect the brand's reputation and goodwill. Franchisees must operate their shops according to the business formats, methods, procedures, designs, layouts, standards, and specifications specified by Cream, all of which can be modified over time. This includes ceasing to conduct the business or holding oneself out to the public as a developer of Jeni's Ice Creams Scoop Shops upon termination or expiration of the agreement.
In essence, a Cream franchisee's failure to adhere to System Standards can result in a breach of contract, potentially leading to termination of the franchise agreement and loss of the right to use the Jeni's® trademarks. It can also negatively impact the goodwill of the System and the Marks. Therefore, franchisees must diligently follow all prescribed standards and specifications to maintain compliance and protect their investment.