What is the relationship between the Preliminary Agreement Deposit for Ben Jerrys (Item 5) and the franchisee's obligations regarding site selection and acquisition/lease (Item 9)?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section(s) in Agreement | Disclosure Document Item | |
|---|---|---|---|
| a. Site selection and acquisition/lease | §§ 2 and 6 of Preliminary Agreement; §§ 3 and 5 of Development Agreement | Items 8 and 11 |
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- The Deposit. PROSPECTIVE OPERATOR has delivered to BEN & JERRY'S a non-refundable deposit (the "Deposit") as evidence of good faith during the Evaluation Period. If the PROSPECTIVE OPERATOR is not an existing operator in the System prior to entering into this Agreement, the Deposit shall be in the amount of $10,000. If the PROSPECTIVE
OPERATOR is an existing operator in the System prior to entering into this Agreement, the Deposit shall be in the amount of $5,000.
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- Identification of a Site for a Shop. Within the Evaluation Period, PROSPECTIVE OPERATOR agrees to locate and submit one or more proposed sites, in the manner described
below, as necessary to identify a specific site for a Shop that BEN & JERRY'S finds acceptable as described below. PROSPECTIVE OPERATOR shall submit to BEN & JERRY'S a site evaluation package ("SEP"), in a form prescribed by BEN & JERRY'S, identifying each proposed site and describing the preliminary design, relevant demographic and cost factors concerning such site. BEN & JERRY'S shall have the right to require that PROSPECTIVE OPERATOR simultaneously submit SEP's for up to three (3) proposed sites. BEN & JERRY'S shall have ten (10) business days after receipt of a SEP from PROSPECTIVE OPERATOR to approve or disapprove, in its sole discretion, the proposed site for the Shop. PROSPECTIVE OPERATOR must obtain written approval by BEN & JERRY'S of the proposed site, including its preliminary design, in the form of a "Site Authorization Notice," before executing a lease or a binding agreement to purchase the proposed site. PROSPECTIVE OPERATOR shall execute a lease that complies with Section 7 of this Preliminary Agreement or a binding agreement to purchase the site within thirty (30) days of approval of the site by BEN & JERRY'S.
PROSPECTIVE OPERATOR acknowledges and agrees that if PROSPECTIVE OPERATOR executes a lease for the Shop prior to obtaining the approval of the site by BEN & JERRY'S, such action shall be a non-curable default and BEN & JERRY'S may, at its option, terminate this Preliminary Agreement immediately and all rights granted hereunder.
PROSPECTIVE OPERATOR hereby acknowledges and agrees that approval by BEN & JERRY'S of a site does not constitute an assurance, representation or warranty of any kind, express or implied, as to the suitability of the site for the Shop or for any other purpose. Approval by BEN & JERRY'S of the site indicates only that BEN & JERRY'S believes the site complies with acceptable minimum criteria established by BEN & JERRY'S solely for its purposes as of the time of the evaluation. Both PROSPECTIVE OPERATOR and BEN & JERRY'S acknowledge that application of criteria that have been effective with respect to other sites and premises may not be predictive of potential for all sites and that, subsequent to approval by BEN & JERRY'S of a site, demographic and/or economic factors, such as competition from other similar businesses, included in or excluded from criteria used by BEN & JERRY'S could change, thereby altering the potential of a site. Such factors are unpredictable and are beyond the control of BEN & JERRY'S. BEN & JERRY'S shall not be responsible for the failure of a site approved by BEN & JERRY'S to meet PROSPECTIVE OPERATOR's expectations as to revenue or operational criteria. PROSPECTIVE OPERATOR further acknowledges and agrees that its acceptance of a franchise for the operation of the Shop at the site is based on its own independent investigation of the suitability of the site.
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the Preliminary Agreement Deposit is related to the franchisee's obligations regarding site selection. Item 9 outlines the franchisee's obligations, including site selection and acquisition/lease, referencing sections 2 and 6 of the Preliminary Agreement. The deposit, as described in the Preliminary Agreement, serves as evidence of good faith during the site evaluation period.
The Preliminary Agreement states that prospective Ben Jerrys operators must locate and submit proposed sites for a Shop that Ben & Jerry's finds acceptable. Ben & Jerry's has the right to require SEP's for up to three proposed sites simultaneously. Ben & Jerry's has ten business days to approve or disapprove a proposed site after receiving the SEP. The prospective operator must obtain written approval of the proposed site before executing a lease or binding agreement to purchase the site. The franchisee has 30 days to execute a lease or binding agreement after Ben Jerrys approves the site.
The deposit amount is $10,000 for new operators and $5,000 for existing operators within the Ben Jerrys system. The Preliminary Agreement specifies that if a prospective operator executes a lease before obtaining site approval from Ben Jerrys, it constitutes a non-curable default, potentially leading to the termination of the Preliminary Agreement and forfeiture of rights. Ben Jerrys approval of a site does not guarantee its suitability or success, as demographic and economic factors can change. The prospective operator's acceptance of a franchise is based on their own independent investigation of the site's suitability.