Can a Ben Jerrys OPERATOR remove or replace the Designated Owner without approval?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
18. CORPORATE, LIMITED LIABILITY COMPANY, OR PARTNERSHIP OPERATOR
- 18.1 If OPERATOR is a corporation, limited liability company, or partnership, each shareholder, member or partner of OPERATOR, and the interest of such person in OPERATOR, shall be identified in Exhibit C hereto. OPERATOR shall immediately furnish BEN & JERRY'S with an update to the information contained in Exhibit C upon any change, provided that nothing in this Section 18.1 shall waive or otherwise limit the terms of Section 14 regarding transfers. Additionally, OPERATOR shall identify in Exhibit C, an Owner, who is acceptable to BEN & JERRY'S, to serve as OPERATOR's "Designated Owner." The Designated Owner is, and at all times during the term of this Agreement shall be, an Owner of at least twenty percent (20%) of the capital stock of OPERATOR (on a fully diluted basis). The Designated Owner must devote his or her full time and best efforts to the management of the operations of the Scoop Shop, and OPERATOR empowers the Designated Owner with the responsibility and decisionmaking authority regarding the Scoop Shop's operation and OPERATOR's business. OPERATOR acknowledges and agrees that BEN & JERRY'S shall have the right to rely upon the Designated Owner for such purposes. Additionally, OPERATOR shall not remove or replace the Designated Owner identified in Exhibit C without the prior written approval of BEN & JERRY'S.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, if the OPERATOR is a corporation, limited liability company, or partnership, they must designate an Owner acceptable to Ben & Jerrys as the 'Designated Owner.' This Designated Owner must own at least 20% of the company's capital stock and devote their full time and best efforts to managing the Scoop Shop. Ben & Jerrys has the right to rely on this Designated Owner for operational decisions.
Importantly, the franchise agreement stipulates that the OPERATOR cannot remove or replace the Designated Owner without obtaining prior written approval from Ben & Jerrys. This requirement ensures that Ben & Jerrys maintains a consistent point of contact and a level of control over the management of each franchise location.
This provision is significant for prospective franchisees because it limits their autonomy in managing their business. If a franchisee wishes to change the Designated Owner, they must seek approval from Ben & Jerrys, which may or may not be granted. This could potentially create challenges if the franchisee has a change in personnel or wishes to restructure their business. Franchisees should discuss this requirement with Ben & Jerrys to fully understand the criteria for Designated Owner approval and the potential implications for their business operations.