Can Ben Jerrys require owners of a beneficial interest in the transferee to guarantee the transferee's obligations?

According to Ben Jerrys's 2025 Franchise Disclosure Document, Ben & Jerry's has the right to require owners of a beneficial interest in the transferee to guarantee the transferee's obligations. Specifically, if the transferee is not an individual, Ben & Jerry's may require the owners of a beneficial interest in the transferee to guarantee the performance of the transferee's obligations in writing, using a form designated by Ben & Jerry's.

This means that if a franchisee is transferring their Ben Jerrys franchise to a company or entity rather than an individual, Ben & Jerry's can demand that the individuals who own a stake in that company personally guarantee that the company will fulfill all the obligations of the franchise agreement. This is a fairly standard practice in franchising, as it provides the franchisor with an additional layer of security, ensuring that there are individuals who are personally liable for the franchise's performance.

For a prospective Ben Jerrys franchisee, this condition highlights the importance of understanding the ownership structure of any entity that will be the transferee. If the franchisee plans to transfer the franchise to a corporation or LLC, they need to be aware that Ben & Jerry's might require personal guarantees from the owners of that entity. This could impact the willingness of potential investors or partners to become involved in the franchise, as they would be taking on personal liability for the business's obligations. Therefore, it is crucial to discuss this requirement with potential transferees and ensure they are comfortable with the possibility of providing a personal guarantee.