What sections of the Cream FDD outline the transfer requirements that trigger Cream's right of first refusal?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or any of your owners wish to conduct a transfer described under Section 12.B and Section 12.C above, you (or your owners) agree to obtain from a responsible and fully disclosed buyer, and send to us, a true and complete copy of a bona fide written offer relating exclusively to an interest in you or in this Agreement and your Shop. The offer must include details of the payment terms of the proposed sale and the sources and terms of any financing for the proposed purchase price. To be a valid, bona fide offer, the proposed purchase price must be in a dollar amount, and the proposed buyer must submit with its offer an earnest money deposit equal to 5% or more of the offering price. We may require you (or your owners) to send us copies of any materials or information sent to the proposed buyer or transferee regarding the possible transaction.
We may elect to purchase the interest offered for the price and on the terms and conditions contained in the offer, provided that: (1) we notify you or your selling owner(s) that we intend to purchase the interest within 60 days after we receive a copy of the offer and all other information we request; (2) we may substitute cash for any form of payment proposed in the offer (such as ownership interests in a privately-held entity); (3) we or our designee will be offered the same terms for any promissory notes or other deferred payments as those offered by the proposed buyer; (4) we will have an additional 90 days to prepare for closing after notifying you of our election to purchase; and (5) we must receive, and you and your owners agree to make, all customary representations and warranties given by the seller of the assets of a business or the ownership interests in any legal business entity.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the conditions that trigger Cream's right of first refusal are detailed in Section 12.B and Section 12.C for transfers related to a Shop, as outlined in Item 23. If a Cream franchisee or any of their owners wish to transfer their interest, they must first obtain a bona fide written offer from a potential buyer and provide Cream with a complete copy of it. This offer must include all payment terms and financing details.
To be considered valid, the offer must specify a purchase price in a dollar amount, and the buyer must include an earnest money deposit of at least 5% of the offering price. Cream has the option to request any additional materials or information that was shared with the prospective buyer. Cream can then elect to purchase the interest themselves, matching the offer's price and terms.
Cream must notify the seller of their intent to purchase within 60 days of receiving the offer and all requested information. Cream can substitute cash for any proposed form of payment and will have an additional 90 days to prepare for closing after giving notice of their election to purchase. If Cream decides not to exercise their right of first refusal, the franchisee can proceed with the sale to the original buyer, provided that Cream approves the transfer and all parties comply with the conditions outlined in Sections 12.B and 12.C.