Under what circumstances will the Cream franchise agreement automatically terminate if an assignment is made?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
A. AUTOMATIC.
This Agreement and all rights granted to you in this Agreement shall automatically terminate without notice if: (1) you make an assignment for the benefit of creditors; (2) you consent to the appointment of a receiver, trustee, or liquidator of all or the substantial part of your property; (3) any Jeni's Ice Creams Scoop Shop you operate under a Franchise Agreement with us is attached, seized, subjected to a writ or distress warrant, or levied upon, unless the attachment, seizure, writ, warrant, or levy is vacated within 30 days; (4) any order appointing a receiver, trustee, or liquidator of you or any Jeni's Ice Creams Scoop Shop you operate under a Franchise Agreement with us is not vacated within 30 days following the order's entry; and/or (5) you or any of your owners file a petition in bankruptcy or a petition in bankruptcy is filed against you.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 Cream Franchise Disclosure Document, the franchise agreement will automatically terminate under specific conditions related to assignments and financial stability. The agreement terminates without notice if the franchisee makes an assignment for the benefit of creditors. This means if the franchisee transfers assets to a third party to satisfy debts, the agreement is immediately terminated.
Additionally, the agreement automatically terminates if the franchisee consents to the appointment of a receiver, trustee, or liquidator for their property. This typically occurs when a business is facing insolvency and requires external management. The agreement also terminates if any Cream shop operated under the franchise agreement is attached, seized, or levied upon, unless these actions are vacated within 30 days.
Furthermore, the agreement is terminated if an order appointing a receiver, trustee, or liquidator is not vacated within 30 days. Finally, the agreement terminates automatically if the franchisee or any of their owners file for bankruptcy, or if a bankruptcy petition is filed against them. These conditions are designed to protect Cream's interests by ensuring the financial stability and operational integrity of its franchisees.