Is a prospective Cream franchisee expected to make their own determination about having sufficient capital?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| I understand that buying a franchise is not a guarantee of success. Purchasing or establishing any business is risky, and the success or failure of the franchise is subject to many variables such as my skills and abilities (and those of my partners, officers, employees), the time my associates and I devote to the business, competition, interest rates, the economy, inflation, operation costs, location, lease terms, the market place generally and other economic and business factors. I am aware of and am willing to undertake these business risks. I understand that the success or failure of my business will depend primarily upon my efforts and not those of Franchisor. | INITIAL: |
|---|---|
| I received a copy of the FDD at least 14 calendar days before I executed a Franchise | INITIAL: |
| Agreement or paid Franchisor or its affiliates any fees. I understand that all of my rights and | |
| responsibilities and those of Franchisor in connection with the franchise are set forth in these | |
| agreements and only in these agreements. I have had the opportunity to personally and | |
| carefully review these documents and have, in fact, done so. I have been advised to have | |
| professionals (such as lawyers and accountants) review the documents for me and to have | |
| them help me understand these documents. I have also been advised to consult with other | |
| franchisees regarding the risks associated with the purchase of the franchise. | |
| Neither the Franchisor nor any of its affiliates, officers, employees or agents (including any | INITIAL: |
| franchise broker) has made a statement, promise or assurance to me concerning any matter | |
| related to the franchise (including those regarding advertising, marketing, training, support | |
| service or assistance provided by Franchisor) that is contrary to, or different from, the | |
| information contained in the FDD. | |
| My decision to purchase the franchise has not been influenced by any oral representations, | INITIAL: |
| assurances, warranties, guarantees or promises whatsoever made by the Franchisor or any of | |
| its officers, employees or agents (including any franchise broker), including as to the | |
| likelihood of success of the franchise. | |
| I have made my own independent determination that I have the capital necessary to fund the | INITIAL: |
| franchised business and my living expenses, particularly during the start-up phase. |
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a prospective franchisee is expected to make their own independent determination regarding their ability to fund the franchised business. Specifically, the franchisee must acknowledge that they have the necessary capital to cover both the business expenses and their personal living expenses, especially during the initial start-up phase. This acknowledgement is part of a broader set of confirmations the franchisee makes, including understanding the risks of the business and having the opportunity to review the FDD with advisors.
This requirement places the onus on the franchisee to conduct thorough financial planning and secure adequate funding. Cream does not guarantee the success of the franchise and emphasizes that various factors, including the franchisee's skills, market conditions, and economic factors, will influence the business's performance. The franchisee's acknowledgement confirms they are not relying on any assurances from Cream regarding the likelihood of success.
In essence, Cream wants to ensure that franchisees are fully aware of the financial commitment and risks involved in starting a franchise. This expectation is typical in franchising, as franchisors generally want to avoid disputes arising from franchisees who later claim they were not adequately informed about the financial requirements. Prospective Cream franchisees should carefully assess their financial situation, create a detailed budget, and potentially secure additional funding to ensure they can meet their financial obligations during the start-up phase and beyond.