Who is responsible for liabilities and obligations arising from contact information related to my Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) cease using and, at our direction, either disable or transfer, assign, or otherwise convey to us full control of all Contact Information and Digital Presences that you used to operate your Shop or that displays any of the Marks or any reference to the franchise system (provided that all liabilities and obligations arising from any such Contact Information or Digital Presence prior to the date of the transfer, assignment, or conveyance to us will remain your sole responsibility in all respects, and any costs we incur in connection therewith will be indemnifiable under Section 16.D);
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a Cream franchisee's agreement is terminated, the franchisee is responsible for all liabilities and obligations arising from any contact information or digital presence used to operate their shop prior to transferring control to Cream. This includes any costs Cream incurs related to this contact information, which the franchisee must cover under the indemnification clause.
This means that even after a Cream franchise closes or is transferred back to the franchisor, the former franchisee remains liable for any issues stemming from the shop's contact information (e.g., phone number, email address) or digital presence (e.g. website, social media accounts) during the time the franchisee operated the business. This could include legal issues, customer complaints, or other liabilities that arise from the use of that information.
For a prospective Cream franchisee, this highlights the importance of managing the shop's contact information and digital presence carefully and responsibly throughout the term of the franchise agreement. It also underscores the need to understand the potential long-term liabilities associated with these assets, even after the franchise is no longer operating. Franchisees should maintain thorough records and seek legal advice to mitigate these risks.