After the Ben Jerrys Development Agreement expires, for how long is the developer restricted from engaging in a competitive business?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.2 DEVELOPER covenants that, except as otherwise approved in writing by BEN & JERRY'S, DEVELOPER shall not, for a continuous uninterrupted period of two (2) years commencing upon the date of: (a) a permitted transfer under the Development Agreement; (b) expiration of the Development Agreement; (c) termination of the Development Agreement (regardless of the cause for termination); (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Section 8; or (e) any or all of the foregoing; either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, affiliate, partnership, corporation or other entity, own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in (as owner or otherwise) any business that is significantly engaged in the sale of ice cream, sorbet, frozen yogurt and/or other frozen dessert items; and is, or is intended to be, located in the Development Area, within a five (5) mile radius of the Development Area or of any Scoop Shop operating under the System; provided, however, that this provision shall not apply to the operation by DEVELOPER of any business under the System under a franchise with BEN & JERRY'S.
Should there be a change in the law which would render this Section 8.2 inoperative, then the parties authorize any judge to make any and all changes to ensure that the restraints for both time and geography are within the scope of the law.
- 8.3 Sections 8.1.3 and 8.2 shall not apply to ownership by DEVELOPER of a less than one percent (1%) beneficial interest in the outstanding equity securities of any corporation which has securities registered under the Securities Exchange Act of 1934.
Source: Item 23 — RECEIPTS (FDD pages 134–358)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, a developer is restricted from engaging in a competitive business for two years after the expiration of the Development Agreement. Specifically, the developer cannot own, maintain, operate, be employed by, provide assistance to, or have any interest in a business significantly engaged in selling ice cream, sorbet, frozen yogurt, or other frozen dessert items.
This restriction applies within the Development Area or within a five-mile radius of the Development Area or any Ben Jerrys Scoop Shop. However, this restriction does not prevent the developer from operating a Ben Jerrys franchise under the Ben Jerrys system.
This non-compete clause is subject to change if the law renders it inoperative, in which case a judge is authorized to make changes to ensure the restraints for time and geography are within the scope of the law. The restriction does not apply to ownership of less than 1% of the equity securities of a corporation registered under the Securities Exchange Act of 1934.