Is Cream required to reimburse franchisees for loss of revenue due to modifications to the Marks or System?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand that the Marks and the System may evolve over time, including after you sign this Agreement. If we decide to modify, substitute, add, or discontinue the use of any Marks or the System, you agree to make such modifications and updates as we specify and to comply with all other directions we give regarding the use of the Marks and the System in connection with your Shop within a reasonable time after receiving notice from us. We are not required to reimburse you for any costs or expenses associated with making such changes, promoting a modified or substitute Mark, or for any loss of revenue due to any modification to the Marks or System.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream is not required to reimburse franchisees for any loss of revenue due to modifications to the Marks or System. Cream may decide to modify, substitute, add, or discontinue the use of any Marks or the System. The franchisee must make such modifications and updates as Cream specifies and comply with all other directions Cream provides regarding the use of the Marks and the System in connection with their Shop within a reasonable time after receiving notice from Cream.
This means that Cream franchisees bear the financial risk associated with changes to the brand's Marks or System. If Cream decides to update its branding, menu, or operational procedures, franchisees are responsible for covering the costs of implementing these changes, and Cream will not compensate them for any resulting loss of income during the transition or due to customer preferences.
This policy is not uncommon in franchising, as franchisors need the flexibility to evolve their brands to stay competitive. However, it's crucial for prospective Cream franchisees to carefully consider the potential financial burden of these required updates and factor it into their business planning. Franchisees should inquire about the typical frequency and cost of system-wide changes to better anticipate these expenses.