Under what conditions can a Cream franchisee terminate the franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and your owners are fully complying with this Agreement and we materially fail to comply with this Agreement and do not correct the failure within 30 days after you deliver written notice of the material failure to us or if we cannot correct the failure within 30 days and we fail to give you within 30 days after your notice reasonable evidence of our effort to correct the failure within a reasonable time, you may terminate this Agreement effective an additional 30 days after you deliver to us written notice of termination. Your termination of this Agreement other than according to this Section 5.B will be deemed a termination without cause and a breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a franchisee can terminate the franchise agreement if they and their owners are fully complying with the agreement, and Cream materially fails to comply with the agreement. In this case, Cream must fail to correct the issue within 30 days after receiving written notice from the franchisee. If Cream cannot correct the failure within those initial 30 days, they must provide reasonable evidence of their effort to correct the failure within a reasonable time. If these conditions are met, the franchisee can terminate the agreement, which becomes effective 30 days after delivering a written notice of termination to Cream.
However, if a Cream franchisee terminates the agreement outside of these specific conditions, it will be considered a termination without cause and a breach of the agreement. This means the franchisee could face significant financial and legal repercussions for terminating the agreement improperly.
It is important for prospective Cream franchisees to understand the specific conditions under which they can terminate the agreement to avoid potential legal and financial issues. Franchisees should carefully document all communications with Cream regarding any failures to comply with the agreement and ensure they follow the outlined procedures for providing notice and allowing Cream an opportunity to correct the issue.