Under what conditions can a Cream franchisee transfer their Development Rights?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
encumbrance, foreclosure, surrender or by operation of law, and/or any transfer of control or management of the Development Rights.
If you intend to list your Development Rights for sale with any broker or agent, you shall do so only after obtaining our written approval of the broker or agent and of the listing agreement. You shall not use or authorize the use of, and no third party shall on your behalf use, any written materials to advertise or promote the transfer of your Development Rights or of any ownership interest in you without our prior written approval.
C. CONDITIONS FOR APPROVAL OF TRANSFER.
We will approve a transfer if all of the following requirements are met:
- (1) you submit an application in writing requesting our consent and providing us all information or documents we request about the transferee and its owners that we request to evaluate their ability to satisfy their respective obligations under our then-current form of Franchise Agreement and any documents ancillary thereto, and each such person must have completed and satisfied all of our application and certification requirements, including the criteria that neither the transferee nor its owners (if the transferee is an Entity) or affiliates have an ownership interest in or perform services for a Competitive Business;
- (2) you and your owners have not violated any provision of this Agreement or any other agreement with us or our affiliates during both the 60-day period before you requested our consent to the transfer and the period between your request and the effective date of the transfer;
- (3) you provide us executed versions of any documents executed by you (or your owners) and transferee (and its owners) to effect the transfer, and all other information we request about the proposed transfer, and such transfer meets all of our requirements, including terms, closing date, purchase price, amount of debt, and payment terms, and we have determined that the purchase price and other terms of the transfer will not adversely affect the transferee's fulfillment of your Development Rights;
- (4) you (and your owners) and the transferee (and its owners) sign all of the documents we are then requiring in connection with a transfer, in a form satisfactory to us, including: (i) a release of any and all claims (except for claims which cannot be released or
waived pursuant to applicable law) against us and our affiliates and our and their owners, officers, directors, employees, and agents, and (ii) covenants that you and your transferring owners agree to satisfy all post-termination obligations under this Agreement;
- (5) if the transfer is of this Agreement or your Development Rights, you have satisfied all of the conditions to transfer all Franchise Agreements that you have executed in connection with this Agreement (and you understand that you may not transfer this Agreement or your Development Rights, without concurrently transferring all associated Franchise Agreements executed pursuant to the terms hereof, and the operations of any associated Jeni's Ice Creams Scoop Shops);
- (6) the transferee must (if the transfer is of this Agreement or your Development Rights) sign our then-current form of area development agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement; provided, that the term of the new area development agreement signed will equal the then-remaining Term and Development Schedule;
- (7) you pay us a transfer fee in the amount of $25,000, provided, that no transfer fee is due for the transfer from a deceased owner to such owner's surviving spouse, provided that such transfer is otherwise subject to the terms and conditions of this Section 4 (provided further, that you reimburse us for any direct costs we incur in connection with documenting and otherwise processing such transfer, including reasonable legal fees); and
- (8) the transferee(s) must (if the transfer is any beneficial or ownership interest in you), sign our then-current form of guaranty undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us, and an updated Attachment D;
- (9) you prov
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a franchisee can transfer their Development Rights if certain conditions are met. Cream must approve the transfer, and the franchisee must submit a written application with all required information about the transferee, ensuring they meet Cream's standards and don't have conflicting business interests. The franchisee and their owners must not have violated any agreements with Cream within 60 days before the transfer request and until the transfer's effective date.
Executed transfer documents must be provided, meeting Cream's requirements for terms, closing date, purchase price, debt amount, and payment terms. Cream assesses whether the transfer terms will negatively impact the transferee's ability to fulfill the Development Rights. All parties involved must sign the necessary documents, including a release of claims against Cream and an agreement to fulfill post-termination obligations. The franchisee must also transfer all associated Franchise Agreements and ensure the continued operation of any associated Jeni's Ice Creams Scoop Shops.
The transferee must sign Cream's current area development agreement, which may differ from the original agreement, though the term will match the remaining term and Development Schedule. A $25,000 transfer fee is required, although this is waived for transfers to a deceased owner's surviving spouse, though direct costs for documenting the transfer must still be reimbursed. The transferee must also sign a guaranty to be bound by all agreements. Finally, the franchisee must provide evidence that appropriate measures have been taken to fulfill the Development Rights, including transferring necessary licenses and agreements.
Cream retains the right to review and correct any information provided to the transferee and provide the transferee with copies of reports related to the Development Rights. These conditions ensure that any transfer of Development Rights maintains Cream's standards and protects its interests while allowing for changes in ownership under specific circumstances.