Under what conditions is the Cream transfer fee charged?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks 1, 2 |
|---|---|---|---|
| Transfer Fee | $25,000 | As incurred, prior to approval of transfer | You must pay this fee as one of the conditions of transferring your Shop and/or your Franchise Agreement and/or Area Development Agreement to another person we approve (other than to a wholly- owned and controlled entity, or if the transfer is from a deceased owner to a surviving spouse, though in such cases you must still reimburse us our processing costs, including legal fees). |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, a transfer fee of $25,000 is required when a franchisee seeks to transfer their Shop, Franchise Agreement, or Area Development Agreement to another party that Cream approves. This fee is due prior to the approval of the transfer.
However, there are exceptions to this fee. A franchisee does not have to pay the $25,000 transfer fee if the transfer is to a wholly-owned and controlled entity or from a deceased owner to a surviving spouse. Even in these cases, the franchisee must still reimburse Cream for processing costs, including legal fees.
This transfer fee is a fairly standard practice in franchising. It is designed to compensate the franchisor for the administrative and legal costs associated with reviewing and approving a transfer, as well as to ensure that the new franchisee meets Cream's standards and is capable of operating the business successfully. The fee also serves as a disincentive for franchisees to enter into agreements lightly, as transferring ownership incurs a significant cost.