Will Ben Jerrys guarantee a franchisee's obligation?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 1: THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]
The Franchises Offered
Ben & Jerry's Scoop Shops are primarily engaged in the sale and distribution of Ben & Jerry's Products and Non-Proprietary Products under the System. If you meet our qualifications and are approved by us, you (individuals, partnerships, corporations, limited liability companies, and the owners of partnerships, corporations, and limited liability companies will be referred to as "you") will sign a Ben & Jerry's Franchise Agreement for a Scoop Shop (the "Franchise Agreement"). If the franchise is owned by more than one individual or a corporation, partnership, or limited liability company, we require that there be an owner, shareholder, partner, or member (who is reasonably acceptable to us) who will have responsibility and decision-making authority regarding the Shop's operations and your business. If the franchisee is a corporation, partnership, or limited liability company, we will require all owners, shareholders, partners, or members to personally sign the guarantee provision in the Franchise Agreement guaranteeing the legal entity's obligations under each agreement. Unless otherwise indicated, the term "Shop" will refer to Scoop Shops and Satellite Shops.
Scoop Shops
Source: Item 10 — FINANCING (FDD page 43)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, if the franchisee is a corporation, partnership, or limited liability company, Ben Jerrys requires all owners, shareholders, partners, or members to personally sign a guarantee provision in the Franchise Agreement. This guarantee ensures that the legal entity's obligations under each agreement are met. This requirement applies to Scoop Shops.
The guarantee provision means that the individuals associated with the franchisee entity (e.g., owners, partners) are personally liable for the financial and operational obligations of the franchise. Ben & Jerry's also states that the obligations of the guarantor do not apply to claims arising due to actions of third parties not under the operation, direction, or control of the operator.
This guarantee is an inducement for Ben Jerrys to enter into the agreement with the franchisee. The guarantor(s) agree to be personally bound by every condition and term in the agreement, including dispute resolution provisions. The guarantor(s) also waive trial by jury and any right to punitive or exemplary damages. The guarantor(s) must also defend, indemnify, and hold Ben & Jerry's harmless against any losses resulting from the operator's failure to perform any obligation under the agreement.
This is a fairly standard practice in franchising, as franchisors often seek personal guarantees from the owners of business entities to ensure accountability and financial responsibility. A prospective Ben Jerrys franchisee should carefully review the guarantee provision with their legal and financial advisors to fully understand the extent of their personal liability.