Does Ben Jerrys require franchisees to make any purchases or leases directly from them?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not require our franchisees to make any purchases or leases from us, and therefore we did not have any revenue from required sales or leases of products or services to franchisees I 2024. Our current practice is that our Parent manufactures Ben & Jerry's Products and sells these products through distributors to various retail businesses, including our franchisees, as described above. Other than the distributors' purchases of Ben & Jerry's Products, our Parent does not receive payments (including rebates or commissions) in connection with suppliers' sales to our franchisees.
During our Parent's last fiscal year, ending December 31, 2024, our Parent's revenue from sales of required purchases of Ben & Jerry's Products (that is, our Parent's revenue from sales of Ben & Jerry's Products made through independent distributors to franchisees under the System) was approximately $23,043,315 based on our Parent's unaudited financial statements for its last fiscal year.
As noted above, during our last fiscal year, we did not sell or lease any products or services to our franchisees. We receive commissions from our Parent in connection with purchases by franchisees of Ben & Jerry's Products through distributors. The commission is determined as a percentage of our Parent's revenues earned on account of sales of Ben & Jerry's Products to our franchisees. The commission paid to us for 2024 was 20% of our Parent's net receipts from franchisee purchases of Ben & Jerry's Products.
Other than the revenues and commissions from our Parent described above, neither we nor our affiliated entities receive payment from suppliers based on purchases by franchisees. We do not have purchasing or distribution cooperatives.
We consider a variety of factors when determining whether to renew or grant additional franchises. Among the factors we consider is compliance with the requirements described above.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Ben & Jerry's Products, Proprietary Software, Trade Dress and Shop Design
You must purchase the Ben & Jerry's Products (as defined in Item 1) for your Shop that have been manufactured by our Parent as we determine in our sole discretion. At present, you must purchase the Ben & Jerry's Products directly from our designated independent distributors for your Shop. We have negotiated purchase arrangements with our suppliers, vendors and distributors for our franchisees. We do not issue specifications for, or entertain requests for approval of, Ben & Jerry's Products.
We have the right to, and in many instances we do, designate a single supplier for any equipment, supplies, services, or products and to require you to purchase exclusively from such approved supplier, which exclusive designated supplier may be us or an affiliate.
Also, you must purchase or lease, as we direct, proprietary graphics and trade dress (including videos, posters, banners, graphics, menu boards and strips, and specialty strips) for the Shop (the "Trade Dress") and proprietary non-ice cream food items, paper, plasticware, food, cleaning supplies, gift items, and equipment from suppliers that we have designated or approved in writing.
Additionally, as described in Item 11 under the heading "Construction and Layout of the Shop," we have the right to designate approved suppliers of design, build and architecture services
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for Shops being developed. During any time that we have designated either or both a "System Design Firm" or a "System Architect" for the area in which your Shop will be located, you may be required to hire such designated System Design Firm(s) and System Architect(s) in developing your Shop. As of the date of this Disclosure Document, "Livit" (www.livit.design) is our designated System Design Firm that provides design and build services for Shops being developed.
None of our officers owns an interest or direct stock ownership in any of the approved suppliers used by Ben & Jerry's franchisees.
Non-Proprietary Products and Other Purchases
None of our officers owns an interest or direct stock ownership in any of the approved suppliers used by Ben & Jerry's franchisees.
Non-Proprietary Products and Other Purchases
All Non-Proprietary Products sold or offered for sale at the Shop must meet our thencurrent standards and specifications and be approved by us prior to any use. Also, in addition to the Trade Dress described above, you must purchase, install, and use all fixtures, furnishings, equipment, décor, supplies, computer system hardware, point-of-sale system hardware, software, signs and materials as we may reasonably require in the Manual or other written materials. You must purchase all Non-Proprietary Products and other items solely from manufacturers, distributors and suppliers who demonstrate to our continuing reasonable satisfaction the ability to meet our responsible sourcing standards, criteria and specifications, who possess adequate quality controls and capacity to supply your needs promptly and reliably, and who have been approved by us in the Manual or otherwise in writing. You may not purchase, offer or sell any Products, or purchase, install, or use on the premises of your Shop, any fixtures, furnishings, equipment, décor, supplies, computer system hardware, point-of-sale system hardware, software, signs and materials that we have not previously approved as meeting our standards and specifications. We may be an approved supplier of some of such items. We may disapprove of Products and suppliers based on our desire to consolidate System purchases through fewer suppliers.
We may designate a single supplier, which may be us or one of our affiliates, for any products, equipment, supplies, or services, in which event you must purchase such items exclusively from the designated supplier. We and/or our affiliates may receive payments or other compensation from suppliers on account of the suppliers' dealings with us, you, or other Ben & Jerry's Shops in the System. We may use any amounts that we receive from suppliers for any purpose that we deem appropriate. We and/or our affiliates may negotiate supply contracts with our suppliers under which we are able to purchase products (including Products), equipment, supplies, and services at a price lower than that at which our franchisees are able to purchase the same items.
Product and Supplier Approvals and Specifications
We may revoke our approval of particular suppliers and/or Products, equipment, supplies, services, and other items when we determine that the supplier and/or Product or other item no longer meets our standards. When you receive written notice that we have revoked our approval of a supplier and/or Product or other item, you must stop purchasing from the disapproved supplier and/or stop selling or using the disapproved Product or other item. Our specifications for Non-Proprietary Products, equipment, supplies, services, and supplier approval are provided to you upon request; however, we have no obligation to make available to prospective suppliers, standards and specifications that we deem confidential. When approving suppliers, we consider ability to meet our then-current standards and specifications, quality controls and capacity to supply franchisees' needs promptly and reliably, and the possibilities for the System to take advantage of marketplace efficiencies. When approving Non-Proprietary Products, equipment, supplies, services, and other items we consider their conformity with our specifications, compatibility with our Ben & Jerry's Products, consistency with the desired image of our System, and availability to the System. We retain the sole control over the Products authorized for sale in our System and may deny our approval of a Product, equipment, supplies, services, or other item for any reason.
Product and Supplier Approvals and Specifications
If you want to purchase unapproved products, or equipment, supplies, services, or Non-Proprietary Products (the "Non-Proprietary Item(s)") from other than approved suppliers, you must submit a request to us in writing, together with the samples or other evidence of conformity with our specifications as we reasonably require. We will have the right to require that our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be evaluated and tested by us or an independent testing facility designated by us. You must pay a charge not to exceed the reasonable cost of the evaluation and testing. We must, within 90 days after we receive your completed written request and completion of evaluation and testing of the proposed supplier and/or any such product or item, notify you in writing of our approval or
disapproval of the proposed supplier and/or the item. If approved, you will be allowed to use the Non-Proprietary Item(s) for a test period of 6 months after which Ben & Jerry's will evaluate whether to approve the Non-Proprietary Item(s) for system-wide use, or decline the Non-Proprietary Item(s) for system-wide use.
We estimate that your total purchases and leases that you must obtain from approved suppliers or distributors, or in accordance with our specifications will represent approximately 75% of your total purchases or leases in establishing your Shop, and approximately 80% of your total purchases or leases in the continuing operation of your Shop.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–41)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, franchisees are not required to make purchases or leases directly from Ben Jerrys. However, franchisees are required to purchase Ben & Jerry's Products manufactured by Ben Jerrys's Parent company, though these purchases are made through designated independent distributors. Ben Jerrys has negotiated purchase arrangements with suppliers, vendors, and distributors for its franchisees.
While direct purchases from Ben Jerrys are not mandatory, franchisees must obtain approximately 75% of their total purchases and leases from approved suppliers or distributors, or according to Ben Jerrys's specifications, when establishing their shop. This requirement increases to approximately 80% during the continuing operation of the shop. Ben Jerrys retains the right to designate a single supplier, which could be Ben Jerrys or an affiliate, for any products, equipment, supplies, or services, and require franchisees to purchase exclusively from that supplier.
Franchisees must also purchase or lease proprietary graphics, trade dress, and non-ice cream food items from designated or approved suppliers. Additionally, Ben Jerrys may designate System Design Firms or System Architects that franchisees may be required to hire for shop development. Ben Jerrys may receive commissions from its Parent company based on franchisee purchases of Ben & Jerry's Products through distributors, and may also receive payments or other compensation from suppliers based on dealings with franchisees.
Ben Jerrys can revoke approval of suppliers or products if they no longer meet the company's standards. Franchisees must seek approval for unapproved products or Non-Proprietary Items, which may involve inspections, evaluations, and testing at the franchisee's expense. Ben Jerrys will then evaluate whether to approve the Non-Proprietary Items for system-wide use after a 6-month test period.