Can Ben Jerrys change the allocation of the Advertising Obligation?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
The Advertising Obligation shall be in the form of the following, and in such proportions as may be designated by BEN & JERRY'S in writing from time to time: (i) contributions paid to the Fund, pursuant to Section 12.2 below, (ii) expenditures by OPERATOR on "local advertising and promotion" pursuant to Section 12.3, and/or (iii) contributions paid to any Cooperative, as may be established pursuant to Section 12.3.4 below.
As of the Effective Date and until written notice from BEN & JERRY'S, the allocation shall be as follows: two percent (2%) of Gross Sales shall be contributed by OPERATOR to the Fund, and two percent (2%) of Gross Sales shall be spent by OPERATOR on local advertising and promotion.
OPERATOR understands and acknowledges the Advertising Obligation is the minimum requirement only, and that OPERATOR may, and is encouraged to, expend additional funds for marketing and promotion.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, Ben Jerrys has the authority to modify the allocation of the Advertising Obligation. The advertising obligation can be met through contributions to the marketing fund, expenditures on local advertising and promotion, and contributions to any cooperative that may be established. Ben Jerrys has the right to designate the proportions of each of these.
As of the effective date of the franchise agreement, unless Ben Jerrys provides written notice otherwise, the allocation is set at two percent of gross sales contributed to the fund and two percent of gross sales spent on local advertising and promotion. However, Ben Jerrys retains the right to change this allocation at its discretion.
This means that a Ben Jerrys franchisee must be prepared for potential changes in how they allocate their advertising budget. While the initial allocation is specified, Ben Jerrys can modify the percentages contributed to the fund versus local advertising, or require contributions to a cooperative if one is established. The franchisee is obligated to follow Ben Jerrys's written instructions regarding these allocations.