What is considered a 'transfer' of interest in the Ben Jerrys franchise agreement?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.2 OPERATOR understands and acknowledges that BEN & JERRY'S has granted this franchise in reliance on OPERATOR's (or, if OPERATOR is a corporation, partnership or limited liability company, its principals') business skill, financial capacity, and personal character.
Accordingly, neither OPERATOR, nor any individual, partnership, corporation, limited liability company, or other legal entity which directly or indirectly owns any interest in OPERATOR or in the Scoop Shop shall sell, assign, transfer, convey, pledge, encumber, merge, or give (collectively, "transfer") away any direct or indirect interest in OPERATOR (including any direct or indirect interest in a corporate or partnership OPERATOR) in the Scoop Shop, or in all or substantially all of the assets of the Scoop Shop or the business franchised hereunder, without the prior written consent of BEN & JERRY'S.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, a 'transfer' encompasses a broad range of actions related to ownership and control of the franchise. Ben Jerrys has granted the franchise to the operator based on their business skills, financial capacity, and personal character. Therefore, any change in who controls or benefits from the franchise is subject to Ben Jerrys's approval.
Specifically, the Ben Jerrys franchise agreement defines 'transfer' as any sale, assignment, transfer, conveyance, pledge, encumbrance, merger, or gift of any direct or indirect interest in the operator, the Scoop Shop, or substantially all of the assets of the Scoop Shop. This includes interests held by individuals, partnerships, corporations, limited liability companies, or any other legal entity that directly or indirectly owns any part of the operator or the Scoop Shop. Essentially, any action that alters the ownership or control of the franchise requires prior written consent from Ben Jerrys.
This provision is typical in franchising, as franchisors want to maintain control over who operates their branded businesses. Ben Jerrys needs to approve any change in ownership to ensure that the new owner meets their standards for business acumen, financial stability, and commitment to the brand. This protects the Ben Jerrys brand and the interests of other franchisees in the system. A prospective franchisee should carefully consider these restrictions on transfer, as they could impact their ability to sell the business or bring in partners in the future.