Are there any claims that are excluded from the release required for a Cream franchise transfer?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
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- Under COMAR 02.02.08.16L, any release required as a condition of renewal, sale and/or assignment/transfer will not apply to claims or liability arising under the Maryland Franchise Registration and Disclosure Law.
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- The Franchise Agreement and Area Development Agreement provide for termination upon bankruptcy. This provision might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.), but we will enforce it to the extent enforceable.
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- A franchisee may bring suit in Maryland for claims arising under the Maryland Franchise Registration Disclosure Law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
MINNESOTA
- The following is added at the end of the chart in Item 17:
With respect to franchises governed by Minnesota law, we will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4 and 5 which require, except in certain specified cases, that you be given 90 days' notice of termination (with 60 days to cure) of the Franchise Agreement and Area Development Agreement and 180 days' notice for non-renewal of the Franchise Agreement and Area Development Agreement.
Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J prohibits us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial or requiring the Area Developer or Franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Disclosure Document, Area Development Agreement or Franchise Agreement can abrogate or reduce any of Area Developer's or Franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or Area Developer's or Franchisee's rights to any procedure, forum or remedies provided for by the laws of the jurisdiction.
Any release required as a condition of renewal or transfer/assignment will not apply to the extent prohibited by Governing Law with respect to claims arising under Minn. Rule 2860.4400D.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the release required for a Cream franchise transfer contains exceptions for specific claims, varying by jurisdiction. In Maryland, any release required as a condition of the sale or transfer of the franchise will not apply to claims or liabilities arising under the Maryland Franchise Registration and Disclosure Law. Similarly, in Minnesota, any release required as a condition of renewal or transfer/assignment will not apply to the extent prohibited by Governing Law with respect to claims arising under Minn. Rule 2860.4400D.
These stipulations mean that franchisees in Maryland and Minnesota retain certain legal rights and protections under their respective state franchise laws, even when signing a general release as part of a transfer. This ensures that franchisees do not inadvertently waive their rights to pursue claims related to franchise law violations.
Prospective Cream franchisees should be aware of these state-specific exceptions and consult with legal counsel to fully understand their rights and obligations during a franchise transfer. This is particularly important in Maryland and Minnesota, where the scope of the release is limited by state franchise laws. Franchisees should also be aware that the franchisor requires a release of any and all claims (except for claims which cannot be released or waived pursuant to applicable law) against Cream and its affiliates and their owners, officers, directors, employees, and agents.