Under the Cream franchise agreement, can an invalid or unenforceable provision be modified?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires or some other action that this Agreement does not require, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any System Standard is invalid, unenforceable, or unlawful, the notice or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and we may modify the invalid or unenforceable provision or System Standard to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. You agree to be bound by any promise or covenant imposing the maximum duty the law permits which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the franchise agreement addresses the possibility of provisions being deemed invalid or unenforceable. Specifically, if any law or rule requires more notice or action than the agreement stipulates, the law or rule will take precedence. Furthermore, Cream has the right to modify any provision or system standard deemed invalid or unenforceable to the extent necessary to make it valid and enforceable, or to delete the unlawful provision entirely.
This clause ensures that the franchise agreement remains compliant with applicable laws and regulations. It also provides Cream with the flexibility to adapt the agreement as needed to maintain its enforceability. This is a fairly standard practice in franchising, as franchise agreements need to operate across various jurisdictions with differing legal requirements.
For a prospective Cream franchisee, this means that certain aspects of the franchise agreement or system standards could be altered to align with local laws. While this offers some protection against unenforceable terms, it also introduces the possibility of changes to the agreement post-signing. It would be prudent for a potential franchisee to seek legal counsel to understand the implications of this clause and how it might affect their rights and obligations under the franchise agreement.