Under what condition is the Cream franchisee entitled to a Protected Territory?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to your continued compliance with this Agreement, and the reserved rights described below, during the Term, neither we nor any of our affiliates will establish, operate, or authorize any other person to establish or operate a Jeni's Ice Creams Scoop Shop in the area described in Attachment C (the "Protected Territory"). If you have not selected a site for your Shop as of the Effective Date, we will identify the Protected Territory once you sign your approved Lease, as described in Section 2.B below. Until such time as we execute Attachment C to identify an approved Premises and Protected Territory for your Shop, you do not have a Protected Territory and/or any other territorial protection of any kind, including in the Site Selection Area and/or any other area surrounding your Premises.
Other than your Protected Territory, you have no territorial protection and we and our affiliates retain all rights to conduct business activities of any kind, including the right to:
(1) establish and operate, and allow others to establish and operate, other Jeni's Ice Creams Scoop Shops using the Marks and the System, at any location outside the Protected Territory, on such terms and conditions we deem appropriate;
(2) establish and operate, and allow others to establish and operate, any other type of business, including any business that may offer products and services which are identical to, similar to, or competitive with products and services offered by Jeni's Ice Creams Scoop Shops, under trade names, trademarks, service marks, and commercial symbols other than the Marks, anywhere in the world, including in the Protected Territory;
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, a Cream franchisee is entitled to a Protected Territory under specific conditions related to their compliance with the franchise agreement and the selection/approval of a site. Cream or its affiliates will not establish or authorize another Jeni's Ice Creams Scoop Shop within the franchisee's Protected Territory during the term of the agreement, as described in Attachment C.
However, this protection is contingent upon the franchisee's continued compliance with the agreement. If the franchisee has not yet selected a site, the Protected Territory will be identified once the approved lease is signed. Until Attachment C is executed to identify the approved premises and Protected Territory, the franchisee does not have any territorial protection.
Even with a Protected Territory, Cream retains significant rights. Cream can establish other types of businesses, including those offering similar or competitive products, under different trade names within the Protected Territory. Cream can also establish other Jeni's Ice Creams Scoop Shops or businesses through non-traditional venues (airports, universities, etc.) or distribution channels (retail, wholesale, online) within the Protected Territory. These stipulations mean that while a franchisee has some territorial exclusivity against other standard Cream franchise locations, Cream retains considerable freedom to operate and authorize other businesses, even those that compete directly, within the same area.