Under the Cream Guaranty and Assumption of Obligations, what is the significance of the 'Effective Date of the Agreement'?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
tion 15D or determining whether to do so | |
ATTACHMENT C TO FRANCHISE AGREEMENT
PREMISES AND PROTECTED TERRITORY
| sell any products and services of any kind and in any manner from | your | Shop and/or using the | |
|---|---|---|---|
| Marks, unless we direct you otherwise in connection with our exercise of our option to purchase |
ATTACHMENT D TO FRANCHISE AGREEMENT
GUARANTY AND ASSUMPTION OF OBLIGATIONS
THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given by each of the undersigned persons indicated below who have executed this Guaranty (each a "Guarantor") to be effective as of the Effective Date of the Agreement (defined below).
In consideration of, and as an inducement to, the execution of that certain Franchise Agreement (the "Agreement") on this date by Jeni's Splendid Ice Creams Franchise, LLC ("us," "we," or "our"), each Guarantor personally and unconditionally (a) guarantees to us and our successors and assigns, for the term of the Agreement and afterward as provided in the Agreement, that ________________________________________ ("Franchise Owner") will punctually pay and perform each and every undertaking, agreement, and covenant set forth in the Agreement and (b) agrees to be personally bound by, and personally li
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the 'Effective Date of the Agreement' is the date from which the Guaranty and Assumption of Obligations become effective. This means that as of this date, the guarantor is bound by the terms of the guaranty, ensuring the Area Developer or Franchise Owner fulfills their obligations under the Area Development Agreement or Franchise Agreement with Jeni's Splendid Ice Creams Franchise, LLC.
The guarantor's obligations extend for the term of the agreement and even afterward as specified in the agreement. This includes guaranteeing that the Area Developer or Franchise Owner will punctually pay and perform every undertaking, agreement, and covenant outlined in the agreement. The guarantor also agrees to be personally bound by and liable for any breaches of the agreement's provisions, including monetary obligations and specific actions or inactions related to non-competition, confidentiality, and transfer requirements.
Furthermore, the 'Effective Date' also marks the commencement of certain obligations and restrictions, such as the covenant not to compete. For instance, the non-compete clause lasts for two years, beginning on the date of termination or expiration of the agreement. However, if a person fails to comply with these obligations as of the date of termination or expiration, the two-year restricted period for that person will commence on the date the person begins to comply with this Section, which may be the date a court order is entered enforcing this provision.
In summary, the 'Effective Date of the Agreement' is a critical point as it triggers the guarantor's responsibilities and liabilities, as well as setting the timeline for certain post-termination obligations. Prospective Cream franchisees and their guarantors should carefully review the agreement to fully understand the implications of this date.