Can the terms of the new franchise agreement for a Cream transfer differ from the original agreement?

According to Cream's 2025 Franchise Disclosure Document, the terms of a new franchise agreement for a transfer may differ significantly from the original agreement. Specifically, if a franchisee transfers their existing franchise agreement or shop to a new owner, the transferee is required to sign Cream's then-current form of franchise agreement and related documents. These documents can include provisions that are materially different from those in the original agreement. This includes potential changes to the royalty fees and brand fund contributions. However, the term of the new franchise agreement will be equal to the remaining term of the original agreement.

This requirement has important implications for both the transferring franchisee and the incoming transferee. The transferring franchisee needs to be aware that the terms they initially agreed to may not be the same for the new owner. The transferee must carefully review the new franchise agreement to understand the current obligations and financial implications, which could be more or less favorable than the original terms. For example, the royalty and brand fund contributions could be higher, affecting the profitability of the Cream shop.

Cream's right to modify the franchise agreement upon transfer is a fairly common practice in franchising. It allows Cream to keep its franchise agreements consistent with current business practices and market conditions. However, prospective franchisees should seek legal counsel to fully understand the differences between the original and the new franchise agreements and how these changes might impact their investment and operations. This also ensures that the transferee is fully aware of all obligations, including any requirements to upgrade, remodel, or refurbish the shop to meet Cream's current standards.