What are the potential consequences for a Cream franchisee who fails to adhere to system standards (Item 8), considering the potential impact on the brand's overall reputation and customer perception?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
A. SYSTEM STANDARDS.
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:
C. NON-DISPARAGEMENT.
During and after the Term, you and your owners agree not to (and to use each of your best efforts to cause each of your respective current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns not to): (1) disparage or otherwise speak or write negatively, directly or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Jeni's® brand, the System, any Jeni's Ice Creams Scoop Shop, any business using the Marks, or any other brand concept operated, licensed, or franchised by us or our affiliates; or (2) take any other action which would, directly or indirectly, subject any of the foregoing to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System or the Marks. Notwithstanding anything to the contrary, in no event will you be prohibited from providing truthful testimony in connection with a legal proceeding or governmental investigation. In addition, nothing in this Agreement shall prohibit you from reporting a suspected violation of law to the appropriate governmental agency or authority.
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; (2) return to us or destroy (as we require) any and all Confidential Information (other than as used by you in connection with the operation of any Jeni's Ice Creams Scoop Shop under a Franchise Agreement with us); (3) comply with all other standards we establish from time to time (and all applicable laws) in connection with the wind-down of your business contemplated by this Agreement; and (4) without limiting any other rights or remedies to which we may be entitled, you must pay all amounts owing to us pursuant to this Agreement up to the date of termination.
- (4) if we do not exercise our option to purchase your Shop under Section 15.D below, promptly and at your own expense, make the alterations we specify to distinguish your Shop clearly from its former appearance and from other Jeni's Ice Creams Scoop Shops, including by removing all materials and signage bearing our Marks and removing from both the interior and exterior of the Premises all materials and components of our trade dress as we determine to be necessary in order to prevent public confusion and in order to comply with the non-competition provisions set forth in Section 15.C;
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees must operate their shops according to Cream's System Standards, which Cream can modify and supplement periodically. While Cream retains the right to establish and modify these standards, the franchisee is responsible for the day-to-day management, operation, implementation, and maintenance of these standards at their shop. These System Standards can regulate any aspect of the shop's operation and maintenance.
Cream also emphasizes the importance of non-disparagement. During and after the franchise term, franchisees (and their related parties) must not speak or write negatively about Cream, its affiliates, directors, officers, employees, representatives, current and former franchisees, the Cream brand, the System, any Cream Scoop Shop, or any business using Cream's Marks. Franchisees must also avoid any action that could subject the aforementioned parties to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact or injure the goodwill of the System or the Marks. However, franchisees are not prohibited from providing truthful testimony in legal proceedings or reporting suspected violations of law to governmental agencies.
Upon termination or expiration of the Franchise Agreement, the franchisee must immediately cease conducting the business, stop holding themselves out to the public as a Cream franchisee (except as permitted under other Franchise Agreements), and return or destroy any and all Confidential Information. Franchisees must also comply with all standards Cream establishes regarding the wind-down of the business and pay all amounts owed to Cream up to the termination date. Additionally, franchisees must take specific actions to de-identify the shop, including removing Cream's Marks and trade dress to prevent public confusion, especially if Cream does not exercise its option to purchase the shop.