Can contributions be paid to a Cooperative as part of the Ben Jerrys Advertising Obligation?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
12. MARKETING AND PROMOTION
Recognizing the value of marketing and promotion, and the importance of the standardization of marketing and promotion programs to the furtherance of the goodwill and public image of the System, OPERATOR and BEN & JERRY'S agree as follows:
- 12.1 BEN & JERRY'S reserves the right to require that OPERATOR, during each month, expend or contribute on advertising and promotion an amount, which, in the aggregate, is equal to four percent (4%) of OPERATOR's Gross Sales during the preceding month to advertise and to promote the Scoop Shop (together, the "Advertising Obligation"). 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)
Yes, according to Ben Jerrys's 2025 Franchise Disclosure Document, contributions can be paid to a Cooperative as part of the advertising obligation. Ben & Jerry's has the right to designate geographical areas for establishing market advertising funds, known as "Cooperatives." If a Cooperative is established for the area where the Scoop Shop is located, the franchisee (referred to as OPERATOR) must become a member within 30 days of the Cooperative's commencement.
The franchisee's contributions to a Cooperative will be credited toward fulfilling the obligation for local advertising and promotional activities, as Ben Jerrys may require. However, these contributions will not count toward the required contributions to the Fund. The franchisee is obligated to submit the required amount to the Cooperative at times determined by Ben Jerrys, along with any statements or reports required by Ben Jerrys or the Cooperative, with Ben Jerrys' prior written approval.
This means that a portion of the franchisee's advertising expenditure can be directed to a local cooperative, if one exists, instead of all funds going directly to Ben Jerrys' marketing fund or being spent on individual local advertising. This provides a mechanism for more localized marketing efforts, potentially tailored to the specific market conditions of the franchisee's location. However, it's important to note that Ben Jerrys retains control over the establishment and governance of these cooperatives, ensuring brand consistency.
Prospective franchisees should inquire about the existence of Cooperatives in their target market and understand the rules and procedures governing these entities. They should also clarify the allocation of advertising funds between the Fund, local advertising, and Cooperative contributions to effectively manage their advertising obligations.