On what basis should a Ben Jerrys operator prepare profit and loss statements?

According to Ben Jerrys's 2025 Franchise Disclosure Document, operators must prepare their profit and loss statements on an accrual basis and in accordance with Generally Accepted Accounting Principles (GAAP). This means that revenue and expenses are recognized when they are earned or incurred, regardless of when cash changes hands. This accounting method provides a more accurate picture of a Ben Jerrys store's financial performance over a specific period.

Ben Jerrys requires operators to submit an annual profit and loss statement reflecting all Gross Sales during the preceding calendar year no later than sixty days after the end of each calendar year. This statement must include any other information that Ben Jerrys may specify. Ben Jerrys also mandates that operators maintain complete and accurate books, records, and accounts in accordance with GAAP, including daily cash reports, journals, ledgers, bank statements, tax returns, invoices, register tapes, balance sheets, and inventory records. These records must be preserved for at least five years.

Adhering to these accounting standards ensures uniformity and transparency across all Ben Jerrys franchise locations, allowing Ben Jerrys to accurately assess the financial health of its franchisees and the overall performance of the franchise system. Furthermore, Ben Jerrys retains the right to examine and audit the financial records of its operators, reinforcing the importance of maintaining accurate and compliant financial statements. If an inspection reveals that any contributions or payments have been understated in any statement or report to Ben & Jerry's, then the operator will immediately pay Ben & Jerry's the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the rate of one and one-half percent (1.5%) per month, or the maximum rate permitted by law, whichever is less.