What are the obligations of the franchisee upon termination or nonrenewal of the Ben Jerrys Development Agreement, according to Section 6.4?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. Term of the | Exhibit A | Last date in Development | |
| agreement | Schedule | ||
| b. Renewal or | Not applicable | Not applicable | |
| extension of the | |||
| term | |||
| c. Requirements for | Not applicable | Not applicable | |
| you to renew or | |||
| extend | |||
| d. Termination by | Not applicable | Not applicable | |
| you | |||
| e. Termination by | Not applicable | Not applicable | |
| us without cause | |||
| f. | Termination by | § 6 | We can terminate if you default. |
| us with cause | |||
| g. "Cause" defined - curable defaults | § 6.3 | All other defaults not specified in §§ 6.1 and 6.2 of Development Agreement. | |
| h. "Cause" defined - non-curable defaults | §§ 6.1 and 6.2 | Bankruptcy; failure to meet requirements of Development Schedule; failure to comply with any individual Franchise Agreement for a Scoop Shop operated by you or a person or entity affiliated with you. | |
| i. | Your obligations on termination/ nonrenewal | § 6.4 | Cease establishing or operating Scoop Shops under the System for which Franchise Agreements have not been signed at the time of termination and compliance with covenants. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 68–76)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, Section 6.4 of the Development Agreement outlines the franchisee's obligations upon termination or nonrenewal. Specifically, the franchisee must cease establishing or operating Scoop Shops under the Ben Jerrys system for which Franchise Agreements have not been signed at the time of termination. Additionally, the franchisee must comply with all covenants outlined in the Development Agreement.
This means that a franchisee who has a Development Agreement with Ben Jerrys, which grants them the right to open multiple locations, must stop opening new locations once the agreement is terminated or not renewed. They can only continue operating those locations for which they already have individual Franchise Agreements in place.
The requirement to comply with covenants suggests that even after termination, certain obligations, such as non-compete clauses or confidentiality agreements, may still apply. A prospective Ben Jerrys franchisee should carefully review the Development Agreement to understand the full scope of these post-termination obligations and how they might impact their future business activities.