What are the potential consequences for a Cream franchisee who fails to pay fees on time (Item 6), considering the franchisor's right to enforce system standards (Item 8)?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) you fail to pay us or our affiliates any amounts due and do not correct the failure within 10 days after written notice to you;
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. No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement, or accord and satisfaction. We are authorized to remove any legend or endorsement, which then will have no effect.
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a franchisee's failure to pay fees on time can lead to significant repercussions. Specifically, if a Cream franchisee fails to pay amounts due to Cream or its affiliates, and does not correct this failure within 10 days after receiving written notice, it constitutes a breach of the franchise agreement. This breach can trigger further actions by Cream. Cream may demand exact compliance with every term, condition, and covenant, including System Standards, and declare any breach a default, potentially leading to termination of the franchise agreement before its natural expiration.
Cream's right to enforce system standards, as detailed in Item 8, is also relevant here. Cream has developed System Standards for various aspects of the business, and franchisees are required to adhere to these standards. Failure to comply with these standards, combined with the failure to pay fees, can compound the issues. Cream's consistent enforcement of these standards, without waiving its rights, means that franchisees cannot expect leniency based on past practices or differing agreements with other franchisees.
In practical terms, a Cream franchisee needs to ensure timely payment of all fees and strict adherence to all system standards to avoid potential default and termination of the franchise agreement. The franchisee should maintain open communication with Cream to address any payment issues promptly and seek clarification on any system standards that are unclear. Furthermore, the franchisee should be aware that Cream is authorized to remove any special or restrictive legends on checks, ensuring that all payments are made without conditions that could be deemed a waiver or compromise.