How are monthly contributions for marketing and promotion determined for a Ben Jerrys franchise?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.3 OPERATOR shall make monthly contributions for marketing and promotion as specified in Section 12.1 based on the Gross Sales of the Scoop Shop.
The Advertising Obligation shall be in the form of the following, and in such proportions as may be designated by BEN & JERRY'S in writing from time to time: (i) contributions paid to the Fund, pursuant to Section 12.2 below, (ii) expenditures by OPERATOR on "local advertising and promotion" pursuant to Section 12.3, and/or (iii) contributions paid to any Cooperative, as may be established pursuant to Section 12.3.4 below.
As of the Effective Date and until written notice from BEN & JERRY'S, the allocation shall be as follows: two percent (2%) of Gross Sales shall be contributed by OPERATOR to the Fund, and two percent (2%) of Gross Sales shall be spent by OPERATOR on local advertising and promotion.
OPERATOR understands and acknowledges the Advertising Obligation is the minimum requirement only, and that OPERATOR may, and is encouraged to, expend additional funds for marketing and promotion.
- 12.2 BEN & JERRY'S has established a marketing fund for the system (the "Fund").
During the existence of the Fund, OPERATOR shall contribute to the Fund in the manner specified in Section 4.5, such amounts as BEN & JERRY'S may specify in accordance with Section 12.1 above.
- 12.3.4 BEN & JERRY'S shall have the right to designate any geographical area for purposes of establishing a market advertising fund ("Cooperative").
If a Cooperative is established for the geographic area in which the Scoop Shop is located, OPERATOR shall become a member of such Cooperative within thirty (30) days after the date on which the Cooperative commences operation.
OPERATOR's contributions to a Cooperative shall be credited towards satisfaction of the obligation for expenditures for local advertising and promotional activities as BEN & JERRY'S may require pursuant to Section 12.1 above, but shall not be credited towards required contributions to the Fund.
- 12.4 In addition to the Advertising Obligations, OPERATOR shall conduct, at its own expense, a grand opening event and related promotional activities and marketing (the "Grand Opening") in accordance with the Grand Opening program set forth in the Manual or otherwise in writing, provided that BEN & JERRY'S shall not require OPERATOR to expend more than Three Thousand Dollars ($3,000) on the Grand Opening.
OPERATOR shall complete the Grand Opening within ninety (90) days after the Scoop Shop commences operation.
OPERATOR acknowledges and agrees that the Grand Opening shall be considered local advertising and promotion, subject to Section 12.3 above.
12.3.3 OPERATOR is required to participate in all marketing campaigns as designated by BEN & JERRY'S, unless it requests in writing to opt out, and an authorization is granted in writing by BEN & JERRY'S.
12.3.1 OPERATOR shall spend such amounts as BEN & JERRY'S may specify in accordance with Section 12.1 above and 12.4 below for the Grand Opening.
For any month in which OPERATOR is required to make expenditures on local advertising and promotion, OPERATOR shall submit to BEN & JERRY'S, in accordance with the procedures set forth in Section 4.5 above or as otherwise specified by BEN & JERRY'S, detailed reports describing the amount of money expended on advertising, marketing and promotion during the previous month (or other time period specified by BEN & JERRY'S).
- 12.6 BEN & JERRY'S shall make available to OPERATOR from time to time, marketing plans and promotional materials, including newspaper mats, coupons, merchandising materials, sales aids, point-of-purchase materials, special promotions, direct mail materials, and similar marketing and promotional materials produced from contributions to the Fund; provided that OPERATOR acknowledges and agrees that BEN & JERRY'S has the right to withhold any such materials from OPERATOR during any period in which OPERATOR is in not in full compliance with its obligations to contribute to the Fund or in which BEN & JERRY'S does not require contributions from OPERATOR.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, franchisees are required to make monthly contributions for marketing and promotion based on the Gross Sales of their Scoop Shop, as specified in Section 12.1 of the franchise agreement. The advertising obligation includes contributions to the marketing fund (the Fund), expenditures on local advertising and promotion, and contributions to any established Cooperative. Ben & Jerry's has the right to designate the proportions of these contributions. As of the effective date of the agreement, the allocation is set at two percent of Gross Sales contributed to the Fund and two percent spent on local advertising and promotion, though Ben & Jerry's can change this allocation with written notice. Franchisees are encouraged to spend additional funds on marketing and promotion beyond the minimum requirement.
Ben & Jerry's has established a marketing fund (the Fund) for the system, and franchisees must contribute to it as specified in Section 4.5, according to the amounts Ben & Jerry's determines under Section 12.1. Ben & Jerry's directs all marketing programs and determines the concepts, materials, and media used, without obligation to ensure that expenditures are equivalent or proportionate to a franchisee's contribution or that any franchisee benefits directly or pro rata from Fund expenditures. Contributions to the Fund are not held in trust, and Ben & Jerry's has no fiduciary obligation to franchisees regarding these contributions, which are non-refundable and used according to Section 12.2.
In addition to the advertising obligations, Ben & Jerry's franchisees must conduct a grand opening event and related promotional activities, not exceeding $3,000, within 90 days of commencing operation. These grand opening activities are considered local advertising and promotion. Franchisees must also participate in all marketing campaigns designated by Ben & Jerry's, unless they request in writing to opt out and receive written authorization from Ben & Jerry's. Franchisees are required to submit detailed reports describing the amount of money expended on advertising, marketing, and promotion during the previous month, along with supporting documentation, as requested by Ben & Jerry's.
Ben & Jerry's may provide marketing plans and promotional materials, but reserves the right to withhold these materials if a franchisee is not in full compliance with their contribution obligations to the Fund or if Ben & Jerry's does not require contributions from the franchisee. All marketing and promotion must be approved by Ben & Jerry's and conform to their standards. Ben & Jerry's also has the right to establish market advertising funds (Cooperatives) in designated geographical areas, and franchisees are required to join these Cooperatives within 30 days of their commencement. Contributions to a Cooperative count towards the local advertising and promotional activities obligation but not towards the Fund contributions.