How is the initial franchise fee determined for an Additional Shop for Ben Jerrys?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
modified to provide for the royalty fee payable for the initial term of such franchise in an
amount that will not exceed five percent (5%) of Gross Sales (as defined in the applicable Franchise Agreement) for such Scoop Shop.
- 3.6 For each Scoop Shop required to be developed under the Development Schedule, DEVELOPER must demonstrate to BEN & JERRY'S its financial ability to open and operate the Scoop Shop, and must complete the pre-opening requirements set forth in the then-current Franchise Agreement.
- 3.7 DEVELOPER shall not be responsible for non-performance or delay in performance occasioned by causes beyond its control including, acts of civil or military authority, failure of civil or military authorities to act, strikes, acts of terrorism, lockouts, embargoes, insurrections, or Acts of God. If any delay occurs, any applicable time period hereunder shall be automatically extended for a period equal to the time lost; provided, however, that DEVELOPER shall make reasonable efforts to correct the reason for such delay and give BEN & JERRY'S prompt written notice of any such delay.
- 3.8 If DEVELOPER, during either (a) the term of this Agreement and DEVELOPER is in compliance with this Agreement and all other agreements with BEN & JERRY'S, and/or (b) within one (1) year from the date of DEVELOPER'S successful completion of the Development Schedule, wishes to obtain the right and obligation to develop one or more Scoop Shops, in addition to the number of Scoop Shops set forth in the Development Schedule (each an "Additional Shop"), DEVELOPER may apply to BEN & JERRY'S for such right and obligation. BEN & JERRY'S shall have the right, in its sole determination, but no obligation, to grant approval to DEVELOPER. The initial franchise fee for an Additional Shop shall be determined according to the schedule of initial franchise fees set forth in Section 4.1 below by considering such Additional Shop as a continuation of the Development Schedule. If the right and obligations with respect to a Additional Shop is granted during the term of this Agreement, this Agreement shall be amended accordingly. Any Additional Shop, and DEVELOPER'S rights and obligations with respect to the development and operation of each Additional Shop, shall be s
Source: Item 23 — RECEIPTS (FDD pages 134–358)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, if a developer in compliance with their agreements wishes to develop one or more additional Scoop Shops beyond the initial development schedule, they may apply to Ben & Jerry's. Ben & Jerry's has the sole right to approve or deny this request. If approved, the initial franchise fee for the Additional Shop is determined by considering it as a continuation of the original Development Schedule, using the initial franchise fee schedule outlined in Section 4.1 of the agreement.
The initial franchise fee schedule in Section 4.1 differentiates between Existing Operators (those who were franchisees before the current agreement) and New Operators. For Existing Operators, the first shop costs $19,750, while the second and additional shops cost $16,000. For New Operators, the first shop costs $39,500, and the second and additional shops cost $19,750. Therefore, the initial franchise fee for an Additional Shop will be either $16,000 (if the developer was an Existing Operator) or $19,750 (if the developer was a New Operator), assuming it is not the first shop under the development agreement.
This means that the cost of opening subsequent locations is lower than the initial franchise fee for the first shop. This is a common practice in franchising to incentivize multi-unit ownership. However, it is important to note that Ben & Jerry's retains the right to deny the request for Additional Shops, and the grant of such rights is subject to all the terms and conditions of the existing Development Agreement.