Does the notification requirement to Ben Jerrys apply to indirect transfers of interest?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.3 OPERATOR shall notify BEN & JERRY'S in writing of any proposed transfer of any direct or indirect interest in this Agreement, in OPERATOR, in the Scoop Shop, or in all or substantially all of the assets of the Scoop Shop at least forty-five (45) days before such transfer is proposed to take place.
BEN & JERRY'S will review the proposed transfer in connection with BEN & JERRY'S rights under Section 14.6 below and/or to determine whether the proposed terms and transferee(s) meets BEN & JERRY'S standards.
OPERATOR authorizes BEN & JERRY'S to communicate with the transferee for the purpose of providing to the transferee any information BEN & JERRY'S deems appropriate.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the notification requirement applies to both direct and indirect transfers of interest. Specifically, if any party holding a direct or indirect interest in the Franchise Agreement, the Operator, the Scoop Shop, or substantially all of the Scoop Shop's assets desires to accept an offer from a third party, the Operator must notify Ben Jerrys. This notification must occur as outlined in Section 14.3 of the agreement.
This requirement means that franchisees must inform Ben Jerrys about any proposed change in ownership, whether it's a direct sale of the franchise or an indirect change, such as a transfer of ownership in the company that owns the franchise. The notification must be made in writing at least 45 days before the proposed transfer. Ben Jerrys will then review the proposed transfer to ensure compliance with the agreement's terms and standards.
Ben Jerrys has the right to review the proposed transfer and may communicate with the potential transferee to gather necessary information. Additionally, Ben Jerrys can set conditions for approving the transfer. These conditions may include ensuring that the franchisee has no outstanding financial obligations, is not in default of any agreement provisions, and executes a general release of claims against Ben Jerrys. This comprehensive approach allows Ben Jerrys to maintain control over who becomes a franchisee and ensures that all transferees meet their standards.
Furthermore, Ben Jerrys retains the right of first refusal, allowing them to purchase the interest on the same terms offered by the third party. This provision gives Ben Jerrys significant control over the transfer process and helps them maintain the quality and consistency of their franchise system. Franchisees need to be aware of these requirements and ensure they comply with all notification and approval processes to avoid potential breaches of the Franchise Agreement.