After termination, expiration, or transfer of the Cream Franchise Agreement, for how long are franchisees subject to non-competition covenants?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Agreement | Summary |
|---|---|---|
| (r) Non- | Franchise Agreement | For two years after termination, expiration, or transfer of the |
| competition | –Section 15.C | Franchise Agreement, you and your owners may not directly or |
| covenants | indirect own and/or provide services to a Competitive Business, | |
| after the | and/or divert any customers to a Competitive Business, which is | |
| franchise is | Section in | located or operating (i) at the Premises or within a 5-mile radius of |
| Provision | Agreement | Summary |
| terminated or | the Premises, or (ii) within a 5-mile radius of any other Jeni’s Ice | |
| expires | Creams Scoop Shop (subject to state law). | |
| Area Development | For two years after termination, expiration, or transfer of the Area | |
| Agreement – Section | Development Agreement, you and your owners may not directly | |
| 5.E | or indirect own and/or provide services to a Competitive Business, and/or divert any customers to a Competitive Business, which is located or operating (i) at the Premises or within a 5-mile radius of the Premises, or (ii) within a 5-mile radius of any other Jeni’s Ice Creams Scoop Shop (subject to state law) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–51)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees and their owners are subject to non-competition covenants for two years after the termination, expiration, or transfer of the Franchise Agreement. During this two-year period, they are restricted from directly or indirectly owning or providing services to a Competitive Business, or diverting customers to a Competitive Business.
The restrictions apply to any Competitive Business located or operating (i) at the Premises or within a 5-mile radius of the Premises, or (ii) within a 5-mile radius of any other Jeni’s Ice Creams Scoop Shop. These restrictions are subject to state law, meaning the enforceability and specific terms may vary depending on the franchisee's location.
These non-compete terms also apply to the Area Development Agreement with the same restrictions. The FDD specifies that these obligations, including those related to non-competition, survive the expiration or termination of the agreement. This means that even after the franchise relationship ends, the franchisee must continue to adhere to these restrictions for the specified duration and within the defined geographic area.