What is the potential for Cream to provide updated financial performance data in future FDDs?
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. The information for the Item 19 Shops is divided into quartiles based on annual Net Profit (defined below) for the 2024 calendar year.
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| Agreement | wide basis, consolidated with any other proceeding, or brought on your behalf by an association or agent. |
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 allows Cream to provide information about the actual or potential financial performance of its franchised and/or company-owned outlets if there is a reasonable basis for the information. This information must be included in the disclosure document. Cream can only provide financial performance information that differs from Item 19 if it provides the actual records of an existing outlet a prospective franchisee is considering buying, or if Cream supplements the information in Item 19 with details about performance at a specific location or under particular circumstances. As of December 31, 2024, Cream had 87 corporate-owned Jeni's Ice Creams Scoop Shops, with 83 operating for the entire 2024 calendar year. The financial data in Item 19 is based on these 83 shops, divided into quartiles based on annual Net Profit. Cream had no franchised outlets operating at the end of the most recent fiscal year, so it could not present results for franchised outlets.
This suggests that Cream has the potential to provide updated financial performance data in future FDDs, contingent on the continued operation of its corporate-owned stores and, more importantly, the establishment of franchised locations. The inclusion of data from franchised outlets in future Item 19 disclosures would provide prospective franchisees with a more relevant and comprehensive understanding of potential financial performance. The current financial performance representation includes data regarding Net Sales, COGS, Gross Profit, Direct Labor, Occupancy, Supplies, Credit Card Fees, Partnership Fees, Repairs and Maintenance, Other Costs, Total Operating Expenses, Imputed Royalty and Brand Fund Contributions, and Net Profit.
For a prospective franchisee, this means that the financial performance data presented is based solely on corporate-owned stores. While this data can offer insights into the brand's performance, it may not accurately reflect the potential performance of a franchised location due to differences in operational control, local market conditions, and other factors. If Cream begins franchising, future FDDs may include financial performance data from franchised locations, providing a more relevant benchmark for potential franchisees. Cream is also obligated to provide written substantiation for the financial performance representation upon reasonable request.
It is important for potential franchisees to understand that the financial performance data provided is not a guarantee of future earnings. As the FDD states, "Some outlets have earned this amount. Your individual results may differ. There is no assurance that you'll earn as much." If a prospective franchisee receives any financial performance information or projections outside of Item 19, they are advised to report it to Cream's management, the Federal Trade Commission, and the appropriate state regulatory agencies.