What financial management practices is a Ben Jerrys operator required to employ?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
matters considered confidential by BEN & JERRY'S.
10.2 At BEN & JERRY'S request, OPERATOR shall require its manager and any personnel having access to any confidential information of BEN & JERRY'S to execute covenants that they will maintain the confidentiality of information they receive in connection with their employment by OPERATOR at the Scoop Shop. Such covenants shall be in a form satisfactory to BEN & JERRY'S, including specific identification of BEN & JERRY'S as a third-party beneficiary of such covenants with the independent right to enforce them.
11. ACCOUNTING, RECORDS AND AUDIT RIGHTS
11.1 OPERATOR agrees to employ sound financial management and planning practices in connection with the Scoop Shop and the business operated hereunder. OPERATOR shall record all sales on a computer-based, point-of-sale record keeping and control system designated by BEN & JERRY'S, or on any other equipment or communication system specified by BEN & JERRY'S in the Manual or otherwise in writing. OPERATOR shall prepare, and shall preserve for at least five (5) years from the dates of their preparation, complete and accurate books, records, and accounts in accordance with generally accepted accounting principles recognized in the United States as consistently applied ("Generally Accepted Accounting Principles" or "GAAP") and in the form and manner prescribed by BEN & JERRY'S from time to time in the Manual or otherwise in writing, including daily cash reports, cash receipts journal and general ledger, cash disbursements journal and weekly payroll register, monthly bank statements, and daily deposit slips and canceled checks, all business tax returns, suppliers invoices (paid and unpaid), dated cash register tapes (detailed and summary), semi-annual balance sheets and monthly profit and loss statements, weekly inventories, records of promotion and coupon redemptions, and such other records and information as BEN & JERRY'S may from time to time request, all of which shall accurately reflect the operations and condition of the Scoop Shop. The reporting requirements of this Section 11 shall be in addition to, and not in lieu of, the electronic reporting required under Section 7.11.2.
11.2 All Gross Sales, sales tax, and charges collected on behalf of third parties shall be recorded by OPERATOR in accordance with the procedures prescribed by BEN & JERRY'S in the Manual or otherwise in writing, and on such point-of-sale record-keeping and control system as BEN & JERRY'S may specify pursuant to Section 7 hereof.
11.3 OPERATOR shall, at OPERATOR's expense, submit to BEN & JERRY'S in the form prescribed by BEN & JERRY'S, the following reports, financial statements, and other data:
11.3.1 No later than the fifteenth (15th) day of each month, or such other time as may correspond to the required payment periods as set forth in Section 4.5, OPERATOR shall submit to BEN & JERRY'S a royalty report, a marketing report, and Gross Sales report for the prior month, and such other information as BEN & JERRY'S specifies, all in the form prescribed by BEN & JERRY'S;
11.3.2 No later than the sixtieth (60th) day of the end of each calendar year, OPERATOR shall submit an annual profit and loss statement reflecting all Gross Sales during the preceding calendar year and such other information as BEN & JERRY'S may specify for the preceding calendar year. OPERATOR shall prepare profit and loss statements on an accrual basis and in accordance with GAAP; and
11.3.3 Other forms, statements, reports, records, information, and data as BEN & JERRY'S may designate.
11.4 BEN & JERRY'S and its agents shall have the right at all reasonable times during the term of this Agreement, and for up to two (2) years thereafter, to examine and copy, at the expense of BEN & JERRY'S, the books, records, accounts, Customer Lists and/or business tax returns of OPERATOR. BEN & JERRY'S shall also have the right, at any time, to have an independent audit made of the books of OPERATOR. If an inspection should reveal that any contributions or payments have been understated in any statement or report to BEN & JERRY'S, then OPERATOR shall immediately pay to 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.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, franchisees must adhere to specific financial management and reporting practices. Ben Jerrys requires operators to employ sound financial management and planning practices for their Scoop Shops. This includes recording all sales on a designated computer-based, point-of-sale system. Franchisees must also maintain complete and accurate books, records, and accounts following Generally Accepted Accounting Principles (GAAP). These records must be preserved for at least five years and include daily cash reports, journals, ledgers, payroll registers, bank statements, deposit slips, tax returns, invoices, cash register tapes, balance sheets, profit and loss statements, inventories, and promotion records.
Ben Jerrys also mandates specific reporting requirements. Franchisees must submit monthly royalty, marketing, and gross sales reports, as well as an annual profit and loss statement prepared on an accrual basis and in accordance with GAAP. These reports are due no later than the fifteenth of each month and the sixtieth day after the end of each calendar year, respectively. Ben Jerrys retains the right to examine and audit the franchisee's financial records at any reasonable time during the agreement term and for up to two years afterward.
If an audit reveals understated contributions or payments, the franchisee must immediately pay the understated amount plus interest at a rate of 1.5% per month or the maximum rate permitted by law. Furthermore, if the understatement is 3% or more, the franchisee must reimburse Ben & Jerrys for all costs associated with the inspection, including travel, lodging, wages, accounting, and legal fees. All data provided by the franchisee to Ben Jerrys, including customer lists, becomes the exclusive property of Ben Jerrys, which can use this data for business purposes without compensating the franchisee.