What rights does the Franchisor have as a third-party beneficiary of the lease terms related to a Cream franchise?

According to the 2025 FDD, Cream, as the Franchisor, is designated as a third-party beneficiary in the lease agreement between the franchisee (Tenant) and the landlord. This grants Cream specific rights, but not the obligation, to enforce terms of the lease that pertain to Cream's rights. This provision ensures that Cream has the legal standing to protect its interests related to the franchise location.

Specifically, the landlord acknowledges the franchise relationship, understanding that the tenant will operate a Cream shop and use Cream's trademarks under the Franchise Agreement. The landlord also consents to the collateral assignment of the lease to Cream, allowing Cream to step in if the franchisee defaults or if Cream terminates the Franchise Agreement. Additionally, Cream has the right to enter the premises for inspections, managing the business, or removing trade fixtures and signage upon termination or expiration of the Franchise Agreement, without assuming liability under the lease.

Furthermore, the lease and any related riders cannot be amended without Cream's prior written consent, giving Cream control over changes that could affect the franchise operation. The landlord must also provide Cream with written notice of any default by the franchisee, granting Cream an additional 15 days beyond the franchisee's cure period to address the default. This allows Cream to protect its brand and operational standards by stepping in to resolve issues before they escalate.

These rights as a third-party beneficiary enable Cream to maintain brand consistency, protect its trademarks, and ensure the smooth operation of the franchise, even in situations where the franchisee faces difficulties. This arrangement provides Cream with a safety net and mechanisms to safeguard its interests and the integrity of the franchise system.