What restrictions must the Cream franchisee entity's organizational documents reflect?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a corporation, limited liability company, or partnership (each, an "Entity"), you represent that you have the authority to execute, deliver, and perform your obligations under this Agreement and all related agreements and are duly organized or formed. You agree to remain validly existing and in good standing under the laws of the state of your formation throughout the Term. You agree to maintain organizational documents, including your operating agreement or partnership agreement, as applicable, that reflect the restrictions on issuance and transfer of any ownership interests
in you described in this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to this Agreement's restrictions.
You agree and represent that Attachment A to this Agreement completely and accurately describes all of your owners and their interests in you as of the Effective Date. Each of your owners with a 10% or greater ownership interest in your Entity must execute a guarantee in the form we prescribe undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us. Our current form of guarantee is attached herein as Attachment D. Subject to our rights and your obligations under Section 12, you and your owners agree to sign and deliver to us revised Attachment A to reflect any permitted changes in the information that Attachment A now contains.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, if a Cream franchisee is a corporation, limited liability company, or partnership, the organizational documents must reflect restrictions on the issuance and transfer of any ownership interests as described in the Franchise Agreement. Furthermore, all certificates and other documents representing ownership interests must include a legend referring to these restrictions outlined in the agreement.
Cream requires that Attachment A to the Franchise Agreement accurately describes all owners and their interests in the entity as of the effective date. Any owner with a 10% or greater ownership interest in the franchisee entity must execute a personal guarantee, binding them jointly and severally to the provisions of the Franchise Agreement and any related ancillary agreements.
Cream franchisees and their owners must update and deliver a revised Attachment A to reflect any permitted changes in the ownership information. This ensures Cream maintains current and accurate records of the ownership structure of its franchisees, allowing them to enforce the terms of the franchise agreement effectively and manage the franchise network.