What is the geographic scope of the non-compete restriction for a Ben Jerrys developer after termination or expiration of the Development Agreement?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
usiness or customer of any shop under the System to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with BEN & JERRY'S (or any of its affiliates), the Products, the Proprietary Marks or the System; or
- 8.1.2 Own, maintain, operate, engage in, be employed by, provide any assistance to, or have any more than a one percent (1%) 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 provided, however, that this provision shall not apply to the operation by DEVELOPER of any business under the System with a Franchise Agreement with BEN & JERRY'S. A business will be considered to be significantly engaged in the sale of ice cream, sorbet, frozen yogurt and/or other frozen dessert items if twenty percent (20%) or more of its Gross Sales (as defined in the Franchise Agreement) in any month are from ice cream, sorbet frozen yogurt and/or other frozen dessert items (a "Competitive Business").
- 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;
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 subject to a non-compete restriction for two years after the termination, expiration, or transfer of the Development Agreement. This restriction prevents the developer from engaging in any business that significantly sells ice cream, sorbet, frozen yogurt, or other frozen dessert items.
The geographic scope of this restriction includes the Development Area itself, as well as any area within a five-mile radius of the Development Area or any Ben Jerrys Scoop Shop operating under the Ben Jerrys system. This means a developer cannot own, operate, be employed by, provide assistance to, or have any interest in a competing business within these areas.
However, there is an exception: the non-compete does not apply if the developer operates a business under the Ben Jerrys system through another franchise agreement with Ben Jerrys. Additionally, 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. Ben Jerrys also retains the right to reduce the scope of these non-compete obligations by providing written notice to the developer.