What is the radius of the non-compete zone around a Cream location after termination?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
ning 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; and/or (3) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, in each case, if such Competitive Business is located or operating:
- (i) at the Premises or within a 5-mile radius of the Premises, or
- (ii) within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
If any person restricted by this Section 15.C fails to comply with these obligations as of the date of termination or expiration, the two-year restricted period for that person will commence on the date the person begins to comply with this Section 15.C, which may be the date a court order is entered enforcing this provision. You and your owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting these skills. Consequently, our enforcing the covenants made in this Section 15.C will not deprive you of your personal goodwill or ability to earn a living. The restrictions in this Section 15.C will also apply after any transfer, to the transferor and its owners, for a period of two years beginning on the effective date of the transfer, with the force and effect as though this Agreement had been terminated for such parties as of such date.
D. OUR RIGHT TO PURCHASE YOUR SHOP.
We have the option to purchase any or all of the assets of your Shop, including your Premises (if you or one of your owners or affiliates owns the Premises) upon termination or expiration of this Agreement. We have the unrestricted right to assign this option to purchase. We may exercise this option by giving you written notice within 30 days after the date of such termination or expiration. The purchase price for your Shop will be the net realizable value of the tangible assets in accordance with the liquidation basis of accounting (not the value of your Shop as a going concern).
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, for two years after the termination or expiration of the Franchise Agreement, the franchisee and their owners are restricted from involvement with a Competitive Business. This restriction applies if the Competitive Business is located or operating at the Premises or within a 5-mile radius of the Premises. It also applies within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop.
This non-compete agreement prevents the franchisee from engaging in a similar business that could draw customers away from Cream, protecting Cream's market share and brand reputation. The term "Competitive Business" means any business (excluding any Jeni's Ice Creams Scoop Shop operated under a franchise agreement with us) operating or granting franchises or licenses to others to operate any business for which ice cream, ice cream-based desserts or drinks, and/or other frozen desserts or drinks, or similar products represents more than 10% of the total gross revenue.
The restrictions extend not only to the franchisee but also to their owners, current and former spouses, immediate family members, owners, officers, directors, employees, representatives, affiliates, successors, and assigns. This broad scope ensures that the franchisee cannot circumvent the non-compete agreement by involving close associates or family members in a competing business. The franchisee acknowledges that they possess general skills and abilities and have other opportunities to earn a living, so enforcing the non-compete will not deprive them of their personal goodwill or ability to earn a living.
If a restricted person fails to comply with these obligations, the two-year restricted period will commence on the date the person begins to comply with the provision, which may be the date a court order is entered enforcing this provision. These restrictions also apply after any transfer, to the transferor and its owners, for a period of two years beginning on the effective date of the transfer, as if the Agreement had been terminated for such parties as of such date. All obligations that survive the Agreement's expiration or termination will continue in full force and effect, including those relating to non-competition, non-interference, confidentiality, and indemnification.