For whose benefit is the goodwill established by a Cream franchisee's use of the Marks and System?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that the Marks and the System are owned by us and/or our affiliates. You acknowledge and agree that your use of the Marks and the System and any goodwill established by that use are exclusively for our and our affiliates' (as applicable) benefit. This Agreement does not confer any goodwill or other interests in the Marks or the System upon you (other than the right to operate your Shop under this Agreement). Your unauthorized use of the Marks and the System would be a breach of this Agreement and an infringement on the intellectual property rights of us and our affiliates (as applicable). Your unauthorized use of the Marks and the System will cause us and our affiliates (as applicable) irreparable harm for which there is no adequate remedy at law and will entitle us and our affiliates (as applicable) to injunctive relief.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the goodwill established by a franchisee's use of the Marks and System exclusively benefits Cream and its affiliates. The FDD states that the Marks and System are owned by Cream and/or its affiliates. As a franchisee, you acknowledge and agree that any goodwill generated through your use of Cream's Marks and System will accrue solely to the benefit of Cream and its affiliates.
This means that while franchisees contribute to building brand recognition and reputation through their operations, they do not gain ownership of the resulting goodwill. The franchise agreement does not grant franchisees any ownership or interest in the Marks or System beyond the right to operate their shop under the terms of the agreement.
Unauthorized use of Cream's Marks and System by a franchisee constitutes a breach of the agreement and an infringement of Cream's intellectual property rights, potentially leading to legal action. Cream and its affiliates would be entitled to injunctive relief and be caused irreparable harm if a franchisee were to use the Marks and System without authorization. This underscores the importance of adhering to the franchise agreement and operating within the bounds of the granted rights.
This is a common arrangement in franchising, where the franchisor retains ownership of the brand and system, and the franchisee benefits from using them under a license. Franchisees should be aware that they are contributing to the overall brand equity of Cream, but that the monetary value of that equity remains with the franchisor.