What is the term length of the new franchise agreement signed during a Cream franchise transfer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) the transferee must (if the transfer is of this Agreement or your Shop), sign our then-current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, including the Royalty and the Brand Fund Contribution; provided, that the term of the new franchise agreement signed will equal the then-remaining Term;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee transfers their existing franchise agreement or shop to a new owner, the new owner must sign Cream's then-current form of franchise agreement. The term length of this new franchise agreement will be equal to the remaining term of the original franchise agreement.
This means that the new franchisee will not receive a full, standard franchise term. Instead, they will only operate the Cream shop for the time remaining on the original agreement. For example, if the original franchisee had 3 years left on their 10-year agreement, the new franchisee's term would only be 3 years.
This could impact the new franchisee's decision to invest in the business, as a shorter term may affect their ability to recoup their investment and build long-term value. It is important for prospective franchisees to carefully consider the remaining term and negotiate terms that reflect the shorter duration.