Under what condition related to premises possession will Cream consider the franchise agreement breached?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
efusal, or if there is a material change in the terms of the sale (which you agree to tell us promptly), we or our designee will have an additional right of first refusal on the same terms as described above.
13. RENEWAL OF YOUR FRANCHISE.
A. YOUR RIGHT TO RENEW YOUR FRANCHISE.
When this Agreement expires, you may renew your franchise to operate your Shop for two successive terms of 5 years each, if you meet the following conditions:
- (1) you give us written notice of your election to acquire a successor franchise no more than 270 days and no less than 180 days before this Agreem
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, maintaining possession of the premises under a lease approved by Cream is a condition for franchise renewal. Specifically, the lease term must be no less than the full term of the renewal franchise. Failure to meet this condition means Cream is not required to offer a renewal franchise, regardless of whether Cream chose to terminate the agreement during the original term. This implies that if a franchisee loses possession of the premises or fails to secure a lease extension that covers the full renewal term, Cream is not obligated to renew the franchise agreement.
This requirement ensures that Cream franchisees have a stable location for the duration of their franchise term and any renewal periods. For prospective franchisees, this highlights the importance of negotiating lease terms that align with the franchise agreement and renewal options. It also underscores the need to maintain a good relationship with the landlord and to proactively address any potential lease issues that could jeopardize the franchise's future.
In the franchise industry, it is common for franchisors to have specific requirements regarding the lease and premises of the franchise location. This is because the location is often a critical factor in the success of the business, and the franchisor wants to ensure that the franchisee has a secure and suitable location. Cream's requirement for lease terms that cover the full renewal franchise term is a way to protect both the franchisee and the franchisor's interests. Prospective franchisees should carefully review the lease terms and renewal options to ensure they meet Cream's requirements and to understand the implications for their franchise agreement.