Can Cream reduce or suspend operations of the Brand Fund?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither we nor any of our affiliates has any fiduciary obligation to you or any other person for administering the Brand Fund. We will not make the financial statements of the Brand Fund available for review by franchisees. We may reduce or suspend Brand Fund Contributions and/or operations of the Brand Fund for one or more periods of any length and terminate (and, if terminated, reinstate) the Brand Fund and associated Brand Fund Contributions. If we terminate the Brand Fund, we will spend the remaining balance of the monies in the Brand Fund in accordance with our System Standards until such amounts are exhausted. We may elect to maintain multiple Brand Funds, whether determined by geographic region, country, or otherwise, or consolidate or merge multiple Brand Funds.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 28–35)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream has the authority to reduce or suspend contributions to, and operations of, the Brand Fund. This means that Cream can, at its discretion, decrease or temporarily halt the collection of Brand Fund contributions from franchisees, and/or pause the activities and programs funded by the Brand Fund. Cream can take this action for any length of time. Cream can also terminate and reinstate the Brand Fund. If Cream terminates the Brand Fund, the remaining balance will be spent according to Cream's System Standards until the funds are exhausted. Cream also has the option to manage multiple Brand Funds, which may be separated by geographic region or country, or to consolidate existing Brand Funds.
For a prospective Cream franchisee, this indicates that the advertising and marketing support provided through the Brand Fund could fluctuate. While franchisees are typically required to contribute a percentage of their net sales to the Brand Fund (currently 2%, and modifiable up to 4%), Cream can alter or suspend this requirement. This could impact the level of advertising and promotional activities benefiting the franchise system as a whole. Franchisees should be aware that Cream has significant control over the Brand Fund and its operations, and there is no guarantee of consistent or continuous advertising support.
It is important to note that Cream does not have any fiduciary duty to franchisees in administering the Brand Fund, and Cream is not obligated to provide financial statements of the Brand Fund for franchisee review. This lack of transparency and fiduciary responsibility places a greater emphasis on the franchisee to assess the potential risks and benefits associated with the Brand Fund and its management. Prospective franchisees should inquire about Cream's historical practices regarding the Brand Fund, including any instances where contributions or operations were reduced or suspended, to better understand the potential impact on their business.