What is prohibited by the non-competition covenants after the Cream Franchise Agreement is terminated or expires?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
ystem Standards we establish from time to time (and all applicable laws) in connection with the closure and de-identification of your Shop, including as it relates to disposing of Personal Information, in any form, in your possession or the possession of any of your employees; and
- (8) give us evidence satisfactory to us of your compliance with these obligations.
If you fail to take any of the actions or refrain from taking any of the actions described above, we may take whatever action and sign whatever documents we deem appropriate on your behalf to cure the deficiencies, including, without liability to you or third parties for trespass or any other claim, to enter the Premises and remove any signs or other materials containing any Marks from your Shop. You must reimburse us for all costs and expenses we incur in correcting any such deficiencies. You hereby appoint us as your true and lawful attorney-in-fact to take such actions and execute such documents on your behalf as may be required to effect the foregoing purposes.
C. COVENANT NOT TO COMPETE.
For two years beginning on the date of termination or expiration of this Agreement, 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) have any direct or indirect interest as an
owner (whether of record, beneficially, or otherwise) in a Competitive Business; (2) lease or sublease the Premises to a Competitive Business;
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to the 2025 FDD, for two years after the Cream Franchise Agreement terminates or expires, franchisees and their owners must not have any direct or indirect interest in a Competitive Business as an owner. They also cannot lease or sublease the premises to a Competitive Business. Furthermore, they are prohibited from performing services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business.
These restrictions apply if the Competitive Business is located or operating at the premises or within a 5-mile radius of the premises. The restrictions also apply within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop. These non-compete obligations extend not only to the franchisee but also to their current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns.
If any individual bound by these restrictions fails to comply upon termination or expiration, the two-year restricted period begins when they start complying with the terms. Cream emphasizes that franchisees possess general skills and abilities and have other opportunities to earn a living, so enforcing these covenants will not deprive them of their personal goodwill or ability to earn a living. These restrictions also apply to the transferor and its owners for two years after any transfer, as if the agreement had been terminated for those parties on the transfer date.