Can Ben Jerrys require that the operator not be in default of any agreement as a condition of transfer approval?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
For any proposed transfer, BEN & JERRY'S has the right to require certain conditions for its approval, which may include the following:
14.3.1 That OPERATOR and its affiliates shall not have any past due monetary obligations or other outstanding obligations to BEN & JERRY'S and its affiliates (under this Agreement or any other Franchise Agreement, or other agreement, with BEN & JERRY'S and its affiliates), the approved suppliers of the System, or the lessor (or sublessor) of the Premises (or any premises at which another Scoop Shop owned or operated by OPERATOR and its affiliates is located);
14.3.2 That OPERATOR and its affiliates shall not be in default of any provision of this Agreement (including the submission of all reports, current to the date of transfer, required by Section 11.3.2), or successor hereto, or any other agreement between OPERATOR and its affiliates and BEN & JERRY'S or its affiliates, the approved suppliers of the System, or the lessor of the Premises; and OPERATOR and its affiliates shall have substantially complied with all the terms and conditions of such agreements during the terms thereof;
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, Ben Jerrys has the right to set certain conditions for approving a franchise transfer. One of these conditions is that the operator and its affiliates must not be in default of any provision of the Franchise Agreement.
This requirement extends not only to the current agreement but also to any other agreement between the operator (and its affiliates) and Ben & Jerrys (or its affiliates), approved system suppliers, or the lessor of the premises. This includes ensuring all reports are submitted and that the operator has substantially complied with all terms and conditions of these agreements during their terms.
For a prospective Ben Jerrys franchisee, this means that to successfully transfer their franchise, they must ensure they are fully compliant with all agreements and have no outstanding defaults. This includes financial obligations, reporting requirements, and any other terms stipulated in their agreements with Ben & Jerrys and related parties. Failure to meet these conditions could prevent the transfer from being approved.