To whom is the real estate rent paid for a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
nchise Agreement)
| Type of Expenditure | Amount | Method of Payment 1 | When Due | To Whom Payment is Made | |
|---|---|---|---|---|---|
| Low | |||||
| Initial Franchise Fee | $40,000 | $40,000 | Lump sum | Upon signing Franchise Agreement | Us |
| Real Estate (3 Months’ | $18,000 | $60,000 | As arranged | As arranged | Landlord |
| Rent) 2 | |||||
| Lease and Utility Security Deposits 3 | $6,000 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, real estate rent is paid to the landlord. The FDD outlines that the estimated initial investment includes costs for real estate, specifically three months' rent. The amount ranges from $18,000 to $60,000, and this payment is made directly to the landlord as arranged.
In addition to the base rent, Cream franchisees may also be required to pay common area maintenance charges, a pro rata share of real estate taxes and insurance, and a pro rata share of other charges, potentially including a shopping center marketing fund, as stipulated in the lease agreement. The actual amount paid can vary based on the size of the shop, the types of charges allocated to tenants, the franchisee's negotiation skills, and the prevailing rental rates in the area.
Furthermore, the lease agreement may require a security deposit, typically equal to one month's rent. Utility security deposits may also be necessary. These deposits, along with the rent, are paid to unaffiliated third parties, such as the landlord or utility companies. Therefore, understanding the lease terms and negotiating favorable conditions with the landlord is crucial for managing the initial investment and ongoing operational costs for a Cream franchise.