After termination of the Cream franchise, can a franchisee own a Competitive Business within a 5-mile radius of any other Jeni's Ice Creams Scoop Shop?

According to the 2025 FDD, for two years after the termination or expiration of the Franchise Agreement, a franchisee and their owners are restricted from engaging in a competitive business. This includes preventing their spouses, immediate family members, owners, officers, directors, employees, and representatives from being involved in such a business. This restriction is designed to protect Cream's market interests and prevent former franchisees from directly competing using the knowledge and resources gained during their time with the franchise.

The FDD does not specify a fixed radius such as 5 miles. Instead, the non-compete clause applies to a defined geographic area. The exact boundaries of this area are determined by whichever is greater: a 3-mile radius around the former Cream shop or the franchisee's Protected Territory. This means that the non-compete area could extend beyond 5 miles if the Protected Territory is larger.

This post-term covenant not to compete is a standard practice in franchising to safeguard the brand and prevent unfair competition. Prospective Cream franchisees should carefully consider the implications of this clause, particularly if they have plans to remain in the same geographic area and operate a similar business after leaving the Cream system. It is important to fully understand the extent of the Protected Territory and how it will affect future business opportunities.