Under what conditions is the Cream transfer fee waived for transfers to a wholly-owned entity?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks 1, 2 |
|---|---|---|---|
| Interest on Late Payment | Lesser of 1.5% per month or the highest commercial contract rate allowed by law | As incurred | All amounts which you owe us for any reason will bear interest accruing as of their due dates until payment is received in full. |
| Insufficient Funds Fee | Lesser of $100 or the highest amount permitted by applicable law, per occurrence | As incurred | We will charge you the lesser of our then-current fee, or the highest amount permitted by applicable law, per occurrence, for checks returned to us due to insufficient funds or in the event there are insufficient funds in the business account you designate to cover our withdrawals. |
| 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). |
| Relocation Fee | $7,500, plus reimbursement of our costs and fees | As incurred | If you request to relocate your Shop and we approve your request, you must pay a relocation fee. |
| Renewal Fee | $20,000 | As incurred, prior to renewal | You must pay this fee as one of the conditions of obtaining a successor franchise upon the expiration of the Franchise Agreement. |
| Non-Approved | Reimbursement of | As incurred | You must reimburse our costs and expenses if you |
| Product or | our costs and | ask us to evaluate any vendors or products that we | |
| Vendor Testing | expenses | have not approved and we agree to do so. | |
| Insurance | 120% of the premiums paid | As incurred | If you fail or refuse to obtain and maintain the insurance we specify, we may obtain such insurance for you and your Shop on your behalf. |
| Franchise Meeting Fee | To be determined (subject to change) | As incurred | We may designate that attendance at a franchise meeting is mandatory for you and/or your Shopkeeper. We will charge this fee even if you or your Shopkeeper do not attend. This fee will not exceed $1,500 per person. |
| Mystery Shoppers | Reimbursement of our costs and expenses | As incurred | We may engage an independent shopping service to evaluate your Shop. We will determine the frequency, nature, and extent of the evaluation services. You must reimburse all fees and costs charged by the independent shopping service. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the standard transfer fee of $25,000 is waived when transferring a Shop, Franchise Agreement, or Area Development Agreement to a wholly-owned and controlled entity. However, even in this case, the franchisee is still responsible for reimbursing Cream for processing costs, including legal fees. This means that while the franchisee avoids the large upfront transfer fee, they must still cover Cream's expenses associated with the transfer.
This condition is relatively common in franchising, as franchisors want to maintain control over who operates their locations and ensure that any transfer, even to a related entity, meets their standards. By requiring reimbursement of processing costs, Cream ensures that it does not incur losses during the transfer process, even when waiving the full transfer fee. This policy helps Cream maintain consistency and quality across its franchise system.
For a prospective Cream franchisee, this means that if they plan to transfer their franchise to a wholly-owned entity, they should budget for legal and processing fees. While the FDD does not specify the exact amount of these costs, it is important to discuss this with Cream to get an estimate and understand what expenses will be involved. This will help in planning and budgeting for the transfer, even though the $25,000 transfer fee itself is waived.