Does Cream have the right to engage in activities not expressly prohibited by the agreement at any location in the world?

According to the 2025 Cream Franchise Disclosure Document, Cream retains the right to engage in activities not expressly prohibited by the franchise agreement at any location worldwide, including within a franchisee's Development Area. This means that unless the franchise agreement specifically forbids a certain action, Cream can undertake that action anywhere in the world.

This reservation of rights extends to various activities. Cream can establish and operate other Cream locations outside a franchisee's Development Area. They can also operate different types of businesses, even those that compete with Cream shops, under different brand names. Cream can also establish alternative distribution channels, such as retail, wholesale, or online sales, even within a franchisee's Development Area. Furthermore, Cream can engage in marketing and promotional activities anywhere in the world, including within a franchisee's territory.

For a prospective Cream franchisee, this means that Cream has considerable freedom to act in its own best interest, even if those actions might impact a franchisee's business. The franchisee's rights are limited to those explicitly granted in the franchise agreement, and Cream retains all other rights. This is a fairly standard clause in franchise agreements, as it allows the franchisor to adapt to changing market conditions and explore new business opportunities. However, it's important for franchisees to understand the scope of these reserved rights and how they might affect their investment.

Cream's broad reservation of rights underscores the importance of carefully reviewing the franchise agreement and understanding the limitations on a franchisee's territorial protection and exclusivity. While a franchisee may have certain protected areas, Cream retains significant latitude to operate and expand its business through various channels, potentially creating competition or impacting the franchisee's market share. Therefore, prospective franchisees should seek legal counsel to fully understand the implications of these reserved rights and negotiate for greater protections where possible.