Under what conditions might Cream grant territorial protections?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We may also grant qualified persons the right to obtain certain territorial protections within a specified area (the "Development Area") if they agree to develop and open multiple Jeni's Ice Creams Scoop Shops according to an agreed upon schedule (the "Development Schedule"). Our current form of Area Development Agreement is attached to this Disclosure Document as Exhibit B-2. Currently, we only offer an Area Development Agreement for a Development Schedule of three to five Jeni's Ice Creams Scoop Shops. The Area Development Agreement does not grant the right to develop or open a Jeni's Ice Creams Scoop Shop at any specific location within the Development Area. To develop a Jeni's Ice Creams Scoop Shop within the Development Area, you must sign our then-current form of Franchise Agreement to develop and operate that Jeni's Ice Creams Scoop Shop. You must sign a Franchise Agreement for your first Jeni's Ice Creams Scoop Shop at the same time you execute the Area Development Agreement. For each subsequent Jeni's Ice Creams Scoop Shop, you will sign our thencurrent form of Franchise Agreement to develop and operate that Jeni's Ice Creams Scoop Shop when we approve the site for that Shop. We and you will agree on the Development Area and Development Schedule before you sign the Area Development Agreement.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 8–10)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, territorial protections may be granted to qualified individuals who commit to developing and opening multiple Jeni's Ice Creams Scoop Shops within a specific area, known as the "Development Area." This arrangement is formalized through an Area Development Agreement, which includes an agreed-upon schedule for opening these locations, referred to as the "Development Schedule." Currently, Cream only offers Area Development Agreements for a Development Schedule of three to five Jeni's Ice Creams Scoop Shops.
It is important to note that the Area Development Agreement does not grant the right to develop or open a Cream shop at any specific location within the Development Area. To develop a Jeni's Ice Creams Scoop Shop within the Development Area, the franchisee must sign Cream's current form of Franchise Agreement to develop and operate that Jeni's Ice Creams Scoop Shop. A Franchise Agreement for the first shop must be signed at the same time the Area Development Agreement is executed. For each subsequent shop, a Franchise Agreement must be signed when Cream approves the site for that shop. The Development Area and Development Schedule will be agreed upon by Cream and the franchisee before the Area Development Agreement is signed.
This approach is common in franchising, where franchisors offer area development agreements to incentivize multi-unit ownership and expansion. However, prospective Cream franchisees should carefully consider the obligations and timelines associated with developing multiple locations, as well as the site approval process, before entering into an Area Development Agreement. They should also review the Franchise Agreement and Area Development Agreement exhibits to fully understand their rights and responsibilities.